Jon Zemke, who has contributed to this site in the past, is the proud owner of four properties bought in past Wayne County foreclosure auctions and two more bought as bank-foreclosures. As we gear up for another round of the Wayne County auction, we asked Jon if one can really make a profit on foreclosures. He thinks so.
Jon says he has not had any "quick flips," but that he has found the $500 properties he has purchased to be a good investment. He does not want to reveal how much capital he put into improvements, but after renovations he has been able to rent a Woodbridge town home out for $$1,175 (and just re-listed it $1,200/month). We went on a walk-through and while the property was no-frills, it was not too different stylistically that what you'd find in a Broderick Tower interior.
He is working on renovating a second Woodbridge home right now which he will also rent out. As for that neighborhood, being zoned for Wayne State Police patrol is a real asset that he thinks make his tenants feel a lot more comfortable; several have been teachers new to the area.
Why is he investing this way? Jon says he is not looking to sell the properties anytime soon, and is able to turn a bigger profit through sweat equity, ie: doing a lot of the work himself. He plans to buy more properties near his existing ones and has been checking the status of nearby homes that may go into foreclosure soon. We asked him about his ultimate goals as a buyer:
"While I don't have a number, I can say I want to hit a point where blight is non-existent in Woodbridge. I think that's possible within five years thanks to the sharp increase in demand for housing, more accessible tax foreclosure auction and a city willing to unload property more aggressively than it has in the past. Yeah, that's a sort of hippy-dippy answer that leans more toward social entrepreneurship than traditional entrepreneurship, but it's what matters to me as much as these buildings being able to help me provide for my family."
Zemke is not sure he is buying in the next foreclosure auction, but he predicts we'll see a strong uptick in new investors this round. He feels his case is one that proves this process works and he expects others to jump on board as well. · $1200 / 3br - 1225ft² - Best rental value in Woodbridge [Craigslist]