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Frequently Asked Questions (FAQ)

We specialize in helping international investors successfully buy residential real estate investment properties in Detroit and neighbouring cities in the state of Michigan, USA. The following are some frequently asked questions from our international investor clients.

This FAQ has been designed with international investors in mind. The answers that we have provided therefore reflect this position as most of our investor clients are international investors. All reference to taxation and tax payment is based on our understanding on current and relevant tax laws which may change in the future. No warranty is made as to the accuracy of any tax rate illustrated.


Q1. How do I buy one of your properties?



You can buy a property through us by having a discussion with a member of our personnel who will guide you through our purchase process. They will also answer questions that you may have. We need to be comfortable that investing in the Detroit or in the state of Michigan real estate market is right for you before we work with you to commit real cash to purchase a property. You can submit your enquiry through our website and our experienced experts will contact you within 24 hours to guide you through our process.


Q2. What do I get when I buy a property through you?



When you buy from us, you not only get a great Property in good neighbourhood but you also receive:

Q3. What is a City of Detroit ACR?



ACR stands for Affidavit of Compliance Responsibility. It is a mandatory City of Detroit house inspection that must be completed every time a house is sold. The city inspects the property to determine what repairs (referred to as violations) need to be completed to make sure the property is refurbished correctly and safely. The buyer has six months from the date of purchase to complete the repairs and get the house re-inspected and passed.


We co-ordinate all of the inspections and do the leg work for getting the ACR from the City of Detroit.


Q4. Is my money at risk if I purchase a property through you?



No. We insist in all cases that you transfer your money directly to a licensed State of Michigan Title company who will conveyance your property purchase transaction.


Q5. When and where do I need to pay my Earnest Money Deposit to?



When we accept your Purchase and Sale Agreement you will need to remit your certified funds to the appointed Conveyancing / Title company. We will contact you with the relevant information at the appropriate time.


Q6. Do you own these Detroit properties?



In most cases, no as we aim to avoid conflicts of interest as much as possible. We have a team of specialist discounted property Sourcers on the ground whose jobs are to research, source, analyse, negotiate and validate exciting property opportunities on our behalf. We source our houses from Banks, investors, and homeowners to resell. We obtain a clear title for each property we are selling.


Q7. Can I assign a property I purchase through you?



Yes, you can. Feel free to discuss your requirement with us.


Q8. How are you providing such great deals?



The economic recession and the fall in the value of real estate in the United States of America since 2008 is common knowledge. This fall has provided a once in a lifetime opportunity to buy properties at a fraction of their values only a few years ago. To take full advantage of this opportunity, we have an experienced wealth creation team of people and strategic partners on the ground that have great contacts with Foreclosure Realtors, Asset Managers, and other sources not readily available to the average investor.


Q9. What can you tell me about City of Detroit property taxes?



City of Detroit property taxes are relatively high and will make the difference between your having a cash-flowing investment property and a liability that you have to pay money on each month. All of the properties that we purchase are pre-screened for taxes to make sure your investment will cash flow. Property taxes are calculated on the SEV (State Equalized Value), which is approximately half of the assessed value. These SEV values can vary greatly from house to house even in the same neighbourhood. We therefore ensure that we do our homework. You can view the Detroit online tax calculator to verify tax amounts.


Q10. Why are property tax amounts so high relative to the value of these properties?



Every state of the United States of America is different when it comes to taxes. Michigan collects most of its tax via property tax. The state of Michigan has no income tax, gas tax is very low, car registration is very low, sales tax is low, and corporate taxes are low. So the main vehicle for Michigan collecting taxes is property tax. Another example would be California which has very low property taxes but they tax everything else really high - high sales tax, high gas tax, super high car registration, income tax, high alcohol and tobacco tax etc.


Q11. Where can I get public records for the properties you are offering?



A very important part of your due diligence is to check the public records for the SEV (State Equalized Value) of your property and more importantly the Taxable Value. We will provide all appropriate information to you before you purchase a property through us.


Q12. Do you offer Detroit / Michigan property management service as well?



We work with the best Detroit property management companies around. We have filtered through hundreds of property management companies and have experienced the best in our current property managers. We provide full contact details and manage the process of getting the property management company involved for each of our clients.


Q13. Do you just offer another company's Detroit foreclosure list?



No, we negotiate one on one on all of the properties that we offer for sale. Many Detroit foreclosure lists that we see sent around contain sub-par houses and deliver inferior value for money.


Q14. How is property ownership transferred in the state of Michigan?



In the state of Michigan, the conveyance of property occurs via state licensed Title Insurance Companies. These Title companies handle both the buyer and seller side of the transaction, all of the paperwork, and the money transaction. They also insure the property transfer with title insurance. The process of transferring the deed from the seller to the buyer is generally referred to as the completion or “closing”.


Q15. What is title insurance?



Title insurance insures the deed transfer of a property guaranteeing that the deed is transferred free and clear of any liens and encumbrances and that all money associated with the transaction is dispersed according to the closing instructions.


Q16. Who pays for title insurance?



In the state of Michigan it is customary for the seller of the property to pay for title insurance.


Q17. How long does it take to conveyance, complete or close on a property?



In the state of Michigan with the aid of state licensed Title companies, the conveyance of property through to closing generally take about 7-10 days.


Q18. What is an earnest money deposit (EMD)?



An EMD is a good faith deposit paid by the buyer to the seller to show that the buyer is indeed serious about the intention to purchase. It is similar to a reservation fee. The Earnest Money Deposit should always be held by the licensed title company who is handling the conveyance/closing as it is considered unprofessional for the seller to hold the EMD. Generally, EMD’s are non-refundable just like most reservation fees they will however be deducted from the purchase price if the transaction is completed.


Q19. Are there any restrictions on non US citizens buying property in America and specifically in Detroit and in Michigan?



For all property purchases for non US citizens below $500,000, there are no significant restrictions. Most banks and title companies do require your full name, current home address, and date of birth.


Q20. How do I buy a Detroit or Michigan property as a non US Citizen?



You can purchase a Detroit or Michigan property the same way as a US Citizen. You will complete a purchase and sale agreement with the seller, deposit an earnest money deposit (EMD) with the licensed title company conveying/closing the property, and the licensed title company will prepare all of the necessary documents and properly disperses all money involved in the transaction. Your identity will also be verified for anti money laundering purposes.


Q21. What is a HUD-1 statement?



A HUD-1, sometimes referred to as a Closing Settlement Statement, is a closing statement that most licensed Title companies use for a conveyance/closing. The HUD-1 has two columns that show all of the fees and money that is transferred between the seller and the buyer. All monies being conveyed / transferred for the property are accounted for on the HUD-1.


Q22. What is a purchase and sale agreement?



A purchase and sale agreement (often referred to as a PA) is an agreement between a seller and buyer for the sale of a property. It includes information including the address of the property for sale, price of the property, future date of the transfer of the property, and how that property is going to be transferred. Signing a purchase and sale agreement (PA) is the first step of buying a property in the state of Michigan, Detroit, and all other states in the U.S. The PA is then sent to the chosen licensed title company to co-ordinate the conveyance/closing on the property.


Q23. What is a “proof of funds”?



A proof of funds is a copy of a bank statement or any other financial instruments proving to the seller that you have enough money to complete the purchase of the property, which is submitted with the purchase and sale agreement. This is customary and necessary for all real estate transactions in the state of Michigan.


Q24. What are closing costs?



Closing cost is a general term for all fees associated with transferring the property over to you as the new owner. The fees are generally about $1,000 and it is customary for the seller to pay for up to 2/3’s of the fees. These costs will be disclosed to you within the closing documents before you close on a purchase.


Q25. What are pro-rated property taxes?



In the state of Michigan, property taxes are paid in two instalments and in advance for the year they are due. So, if the buyer had purchased the property when the taxes were due, all of the instalment taxes due would have to be paid at closing. However, if closing takes place part way into the period, then a reduction is made for any period which is past.


Q26. Why would a seller sell their property for less than they owe of it?



The sellers of most of these properties are Banks. So many houses went to foreclosure so fast, they decided just to dump them fast. There are several reasons for this. Banks are not good at property management. Also, there are strict Federal Reserve limits on cash reserves on bad loans. In general terms, once a Bank has foreclosed on a house, the loan is now a bad loan, and a multiple of that loan amount must be kept on the Bank’s balance sheet as cash reserve as per the Federal Reserve guidelines. This is money they can’t lend out. Also, the more bad loans a Bank has, the less money they can borrow from the Federal Reserve.


Q27. Why are local Americans not snapping these properties up by truck load?



Those who are financially astute and have the funds to take advantage of this once in a lifetime opportunity are doing so and are building substantial wealth for their futures.


Q28. How does one receive original title deeds (i.e. title of ownership) of any property purchased?



The Land Department will forward to you by post, the original deed of your property to you once registered by the Title Company. This timeframe for this can be up to six months.


Q29. How can one ascertain that a Title company has remitted taxes onto the relevant treasury dept?



In order to file the deed all due taxes have to be paid. That is why it is so important that when you buy, you get a Warranty deed instead of lesser deeds.


Q30. Is there a variation in the rent receivable on a property on the open market versus one for a Section 8 tenant? If so, how much and why?



Yes, you can usually get up to 10% more in rent from someone who is not on section 8 program. However, you take the risk that they might not pay in certain circumstances. Most of our clients prefer section 8 tenants because the government always pays. We will discuss both options with you in full before you make a purchase.


Q31. How would one keep up to date with important correspondence on matters such as the local authority taxes, utilities etc once tenants have moved in?



This is the job of the property manager with the exception of taxes. We offer on-going support to you on this. Further details provided upon request.


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