I was talking to my niece, Emily, about her upcoming baby shower and the instructions her guests received to bring gifts that inspired creativity when she gifted me with a bit of a surprise. It turns out that, after the newest member of the family is born, Emily has some career goals. She doesn’t want to just jump back into her old desk job, though. She wants to become a real estate investor, like me, because of the time flexibility it’ll provide her as the mother of a young child. And, since investing in real estate allows for unlimited earning potential, too, she sees it as a way to help keep food on the table and, hopefully, someday put her children through college.
She was concerned, however, about where she’d even find real estate investment opportunities here in Flint without the years of experience at getting good leads that I had. Buying properties from the Genesee County Land Bank looked promising from some of the preliminary research she’d already done. But, with baby on the brain, she wondered if she’d missed some critical details about how the land bank works and whether there were better ways to find the best deals. Honestly, I couldn’t believe that with everything on her plate that she was worrying about this now. Still, that’s Emily for you: while in the middle of reaching one goal, she’s got an eye on creating the next. So, I regaled her with my knowledge of the Genesee County Land Bank—and then, of raising kids.
How the Genesee County Land Bank Works for Buying Properties
Like the Detroit Land Bank in Wayne County, the Genesee County Land Bank Authority (GCLBA) was established to help eliminate neighborhood blight and restore property values in Flint and surrounding communities. By acquiring, then selling, vacant and abandoned properties to individuals and organizations interested in returning these properties to good use, this land bank hopes to someday create a “blight-free Flint.” And, since 2014, they appear to be on track to do just that. In their first year of operations, almost 1,800 homes were demolished. To date, there have been over 5,000 demolitions. But, they don’t just demo properties that are unsafe and unsightly. They also sell homes that are in need of significant repairs to investors—7,300 of them so far—in an effort to get them rehabbed and returned to the tax rolls, providing further funding to other community revitalization projects.
It’s partly because the price to purchase these homes is usually negotiable that they can be attractive buys for many real estate investors, especially budding investors like my niece. Since the majority of the GCLBA’s current inventory is tax-foreclosed properties, at most they may be listed for the amount of back taxes owed plus the costs the land bank incurred in bringing them to sale. But, many have no minimum asking price listed on the GCLBA’s website. So, assuming your offer on a property is the highest received, it’s possible to buy one of their homes for a pretty good price. If you perform a renovation that fits with the program’s vision and within the timeline they prescribe, you may be able to realize potentially great returns when it’s time to sell your investment property, too.
Unfortunately, it’s not as easy as it first sounds to buy and renovate a house from the Genesee County Land Bank. After finding a distressed property on their website, you must submit an application that includes your intended use of the property, a plan for its renovation, and evidence that you can afford both the purchase price and the rehab costs. Your application will not get approved without these items. But, even with them, approval can take up to 90 days. By then, whether you would have been the highest bidder or not, another investor—or one of the groups given priority, like nonprofit corporations and government entities—may have already gotten the green light to move forward on the deal. So, you could end up tying up your funds for a house that will never become yours and missing other opportunities that come down the pipe.
Should the house you want to purchase still be available and your application to bid does get approved, however, your opportunities to see what you’re buying will be limited. Sometimes, the land bank holds open houses and, sometimes, not. Even when they do, you won’t likely get to schedule a private showing. And, don’t expect to have enough time to work in a home inspection before, during, or after you’ve visited. This puts you at risk of buying a property that’s too costly to fix and still see returns. Plus, since bid acceptance is often granted on a first-come, first-served basis, even if you think you like what you see during that one viewing, you should get first in line with your highest and best offer fast.
But, you may want to think twice about making an offer if there’s any chance you can’t close in 21 days—the maximum time to close you’re allowed. Since the GCLBA sells their inventory strictly as-is and without guarantees, it’s possible you won’t be able to close if you have a hard time getting title insurance or, without access for a professional inspection, your hard money lender pulls the plug on your funds. If you back out of the deal, however, you’ll forfeit the 10% deposit you paid and may not get to bid with the land bank again.
For all the time you spend waiting on an approved application only to have to hurry up and close on a deal that may eventually be a bust, it’s probably not worth it to buy from this land bank at all. Of course, there are inherent risks to investing in residential property no matter where you find your leads. But, waiting around on a house that you don’t get to buy or buying a house that you don’t get to inspect, is not being a smart investor. Buying directly from distressed homeowners before they’re foreclosed on and lose their homes to programs like the GCLBA, however, is. And, getting those leads is a lot easier than it may seem at first.
How to Not Work So Hard at Finding Distressed Homes
As an independently owned and operated HomeVestors® franchisee, I’m able to provide financial “solutions for ugly situations®,” like when a homeowner falls behind on property taxes and is faced with losing their house. I do this by buying their home before they lose it and, potentially, any equity they already have in it. Then, I renovate and resell the property to another family who’s ready, able, and willing to care for it. It’s not only how I make a living as an investor, but it’s also how I do my part caring for Flint and my neighbors who live here.
My work is made easier thanks to the marketing tools and resources that I have access to as a HomeVestors® franchisee. These resources, like the widely-trusted “We Buy Ugly Houses®” national ad campaign, reach homeowners in distress all across Genesee County and beyond. So, when things get bad, homeowners in distress know who to call before their situations get worse—a professional real estate investor, like me. This makes trying to buy from the land bank an unnecessary use of my time. And, since I have kids of my own to raise, like Emily soon will, time well spent means everything.
Don’t waste your time chasing Genesee County Land Bank leads. Call HomeVestors, instead, to learn about becoming a HomeVestors® franchisee in Flint, today!
Each franchise office is independently owned and operated.