tIn 1960, I was came home crying because I got beat up by a bully. My mom told me to shut up and go back and punch the bully in the nose as hard as I could. It succeeded! The bully grabbed his nose and went home. The next day I was famous at Sill Elementary School. I beat the bully.
tIn 1980, before I was 30, the same thing happened; only this time the bully was the economy. The country was in a recession with 20-percent interest rates, and I had millions of dollars borrowed on credit. I was about to get wiped out, but the lesson I had learned from my mom years ago still resonated within my soul. I transferred my property management business and rolled up my sleeves and went to work. By 1984, I had closed more than $150 million in tax shelter deals. I made a few million dollars in commissions and I was back in the groove. I confirmed, “When the going gets tough, the tough get going.”
tIn 2007, the boogey man came back — this time as the Great Recession. The good news is that I had seen this movie before so I knew what to expect. We have to deal with the issues and opportunities or they will deal with us.
tToday we have the chance to buy real estate for 20 percent on the dollar, and we can make money without having cash, credit, or collateral. So why are we crying? After all, the most valuable part of a real estate transaction is finding, underwriting, and structuring a deal for maximum value.
tWhat about you? Have you been crying about your house or apartment building in foreclosure? Before the tears start rolling, why not find out if you can buy the mortgage back for 20 cents on the dollar? Or even $500 in the case of a property tax auction.
tMost foreclosures today are big blessings. It allows the occupant or the titleholder to purchase the property for a discounted price at a sheriff sale or to bid and buy the property at a public auction for as low as $500. When property is bought at an auction all of the liens and mortgages disappear so long as you do not buy it back in the same name and accidentally cause it to become a redemption. The best advice is to take an expert with you.
tBelieve it or not, in 2012, my real estate class bought five houses for less than $4,000. All the houses had homeowners who did not even bother to bid $500 to buy their own home back … go figure?
tHow about you? Are you acquiring assets now or sleeping through the greatest opportunities you might ever have? If the latter is true, consider putting down the knitting needles and empower yourself with real estate knowledge that will allow you to succeed. Invest in yourself. Not only will you help yourself, but you will also help stabilize the city of Detroit.
tHerbert J. Strather is chairman of Strather and Associates, a real estate development and investment firm in Detroit.