New Investors Helping Reduce Foreclosed Homes in Lansing
FOX 47 News
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If you lost your home to foreclosure between 2008 and 2011, expect a big packet in the mail in the coming weeks. Claim forms to see who qualifies for Michigan's portion of a $25 billion national settlement are going out to nearly 148,000 borrowers.
The packet will also include a letter from the attorney general and instructions on how to fill out the claim form. The deadline for all claims is January and checks won't be mailed until mid-next year.
Many of those foreclosures are now in the hands of banks or cities, like Lansing. They want out of the real estate game and are turning to a new crop of investors and organizations who are buying up foreclosed property and rehabbing homes so they can be sold.
"The chimney on the back of the house was falling off, it had been abandoned for five and a half years, the furnace was not working, the plumbing was frozen and destroyed, the roof was falling in on itself," investor Rich Floyd said, of a home he recently purchased.
Floyd may be a face of hope for the mid-Michigan housing market. He is one of a growing number of investors taking a gamble on foreclosed properties.
"There's a lot of time and effort that goes into it," Floyd said. "We look at 100 homes before we buy one house."
He's had a lot to pick from in recent years.
Ingham County Treasurer Eric Schertzing says mortgage foreclosures in Lansing are down from last year, but the city is still seeing about 1,000 a year. Recovery on the tax foreclosure side is coming slower. Lansing saw a small increase in tax foreclosures this year, but those numbers might not tell the whole story.
Schertzing points to record sales for Land Bank homes and buoyed interest this August in auction properties.
"We had 215 people register for the auction, they were younger, new investors coming into the marketplace I think expressing a great deal of confidence in the recovery because 80 percent of the individual properties that were offered were snatched up," he said.
Purchased by people like Floyd, who are putting properties back on the tax rolls and hopefully back in the hands of homeowners.
"A lot of times the neighbors will stop by and say we've looked at that house for five years and you know we just always wanted something to happen with it and you're finally doing it," Floyd said. "You're gonna improve the value of the homes around it and finally we're not going to have an eyesore in the neighborhood."
Not all investors find success in the Lansing market. Floyd says many flipped homes turn into rentals and those are not the kinds of quality properties the City of Lansing would like to see. Floyd says his project will be single family.
Some of the tax foreclosures in Lansing are banks getting behind. Many have so much property, they're losing track of who they owe and when. Others simply choose not to pay because that is a cheaper alternative.