Friday, February 8, 2013

Wasted Opportunities In Milwaukee

Back to solving the real estate crisis one city at a time. It's bad enough that I find too many realty associations using far too much of their collective man power coming up with market statistics that seem more often to be negative than to help.

For some odd reason, the President of the Greater Milwaukee Association of Realtors is waiting on government money he may or may not get instead of taking action on behalf of the city and the members of the Association he leads.

This story, published by the Milwaukee Journal-Sentinel, presents the situation:

There is no debating the problems with the marketplace created by abandoned homes that were foreclosed upon and/or not sold for whatever reason. However, I thought the local realty association should be in place to HELP its members and help the community, instead of begging for government money to make their 'industry' look good.

Nobody asked me, but there is a much better solution. The article states that the average cost to raze these abandoned properties which "hurt" the neighborhoods they sit within is $15,000.

Meanwhile, it seems to me that there are plenty of investors and rehabbers out there who are looking for opportunities to cash in over the next few years.

So here is how to solve the problem without waiting to find out whether or not the community will ever get the government money.

Have the City of Milwaukee sell these properties for land value PLUS $15,000 each. Use that "extra" $15,000 to fund the razing of the home on that property, clearing the way for the buyer to build a brand new home from the ground up and sell it. The buyer gets a period of, say, 24 months to build on this land.

Everybody wins. The city gets rid of the abandoned homes which are causing problems for "real" home sellers and for residents near these properties in terms of property value and neighborhood image, and they do so, in effect, at no cost. The buyer/investor/rehabber gets a highly profitable opportunity to build and sell within 2 years at a nice profit.

And, instead of waiting for someone else to help their industry, chances are some realty agents (members of this Association) would earn a buyer's commission for each transaction they work with. While helping their local community to improve.

Instead of asking for millions of dollars to solve the problem, just take a few thousand dollars to hire someone on behalf of the City of Milwaukee to coordinate this effort.

In this instance, if you tear it down, they will come.

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