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We’re so excited you’re considering investing in Detroit and it is our aim to make the process as streamlined as possible for all investors but most importantly for those who aren’t quite sure how to get started. The following guide will break down the steps and what options you should consider for your individual circumstance.
1) Research Investment Properties
Investment Properties come in all shapes and sizes. Some investors want to look for commercial real estate opportunities to rent to businesses while others may be more interested in residential investment opportunities for individuals and families. If you’ve made it this far you likely already have some sense of what you’re interested in pursuing, but we advise you to check out the full scope of what’s available as you may learn about something you previously hadn’t considered.
2) Make an Offer
Once you select a property, it is time to draw up an offer. This is done by writing out a Contract for Sale & Purchase which is a standard document used in all Detroit real estate sales and is approved by the Detroit bar association.
3) Inspection and Title Work
In this step, after an offer and contract is made, we allow you to (if you choose) hire a real estate inspector (if you need a referral we can give you one). The inspector will go through the house and check everything to see if the house is fully functional and solid. From structure to roof, they will write a report and allow you to read this report once done, with an explanation on what may be a future issue. If you are satisfied with the report, and the house is good to go, we then will proceed to ask for a down payment (10% of the purchase price) to be held at the title companies office. The title company will then run title to make sure there are no liens on the property, and issue you title insurance. This is important for many reasons because it protects you incase anyone else ever make a claim on the house or has an interest that the title company did not find in the searches. That being said, it is safe and a MUST to have because it insures your money and makes your investment safe!”
4) The Entity Question
A common fork in the road for investors looking to diversify in the states is whether to buy the real estate under your own name or to proceed with their investments through an LLC type organization. The answer usually comes down to how much risk are you willing to take on as an individual (and their assets) can be held directly accountable if properties are owned under their name. An LLC type company, is not only tax transparent, but will shield your wealth from any unfortunate mishaps or lawsuits that may result during the tenure of your ownership.
We generally advise going with the latter as it provides the highest level of personal security from the unforeseen and does not affect your ability to generate profit.
5) The Closing
Once title work has been completed and if it checks out and is clean, we can then proceed to setting up a closing. A Closing Statement will be provided for you generally 48 hours before the closing day for you to be able to review your final numbers. This is done so that it allows you to raise any questions, should you have any. If all is well, we can proceed to closing day!!!!!
6) Congratulations!
That’s all folks! You are now the proud owner of prime real estate in a booming metropolitan area whose growth will result in revitalizing a once lost American institution.
Once you get going we can connect you to our property management software where you can keep tabs on your account for items such as rent collection, property tax payments, etc. Your revenue will be transferred to you either monthly, quarterly, or semi-annually depending on your preferences. We make it easy for you to manage your property no matter where you are!
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