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By Karen Gentry | TransActions
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MUSKEGON — The Pure Michigan campaign and word-of-mouth draws them in to Muskegon.

Then Dave Medendorp, manager of ALT Realtors and Property Management, takes them to Mia & Grace Bakery Bistro on Third Street or the new Lake House restaurant in downtown Muskegon. He then has them tour Baker College’s Culinary Institute of Michigan and shows them Muskegon’s beautiful Lake Michigan beaches.

Then to seal the deal it’s a visit with Cindy Larsen with the Muskegon Area Chamber of Commerce or Chris McGuigan with the Community Foundation for Muskegon County.

Why do all this? Medendorp takes the extra steps to close on home sales in Muskegon with out-of-state and international investors.

Medendorp has worked with buyers of residential properties from Spain, England, Colorado, Chicago and Illinois. The values attract them to Muskegon, where it’s possible to purchase a three-bedroom, two-bathroom home in a nice area for under $25,000. In the last 18 months, ALT Realtors has been dealing almost exclusively with cash buyers who can easily see returns of 14 percent or more.

“Out-of-area investors have more confidence in Muskegon than some of the local people do,” Medendorp told TransActions. “People think this is the best place to put their money to work.”

Medendorp said buyers are snapping up homes in Lakeside and between Lakeside and downtown Muskegon.

“Pretty much all of Muskegon is underpriced. Some of the best values are close to Muskegon Lake and close to downtown,” Medendorp said.

Examples of buyers include one who bought a 21-unit apartment building and then later bought a $150,000 home on Muskegon Boulevard. The buyer remarked to Medendorp that he can live a grand lifestyle in Muskegon at half the price of a similar home in Saugatuck. That buyer also invested $200,000 more into the apartment building to fix it up. New York friends of an investor from England suggested Muskegon, so the man invested $500,000 in about 60 properties in and around the city.

Medendorp said another buyer from Maine with an Internet business chose to buy a home in Muskegon for $200,000 less than a comparable home in other states.

Although the margins of selling lower priced homes are small, Medendorp said some buyers are planning on buying portfolios of 60 or 70 homes.
“Right now, we’re working with two different investors looking at buying large portfolios of homes,” Medendorp said.

These out-of-the-area investors typically hire his company to manage the properties. Property management represents approximately 80 percent of ALT Realtors and Property Management’s business, and the company currently manages almost 500 units. Medendorp said there’s more good renters than bad, although people hear the horror stories about the bad ones. Because of the economy, ALT Realtors has had to lower the qualification levels for prospective tenants, and in some cases, the company is accepting some bad credit and lowering the income qualifications.

“We run at about 90 percent occupancy and collect about 80 percent of possible rent,” Medendorp said. This compared to 95 percent occupancy and collecting 90 percent of possible money 10 years ago.

Medendorp said he expects to see some recovery of real estate prices in Spring 2012.

“Right now, we hear about 50 percent good news on the economy and 50 percent bad news,” Medendorp said. “We’ll stay in the middle where we’re at for another year and see real estate prices start to rise in 2013.”

To fix up properties, ALT Realtors and Property Management hires all local contractors and pays out a minimum of $8,000 per week to subcontractors and for payroll, Medendorp said.

Across town, Lucille Bulthouse, associate broker with ReMax Muskegon, said her company is dealing with a slow and stagnant residential real estate market in Muskegon, and she doesn’t think it will get better until more people have jobs. Her income has been cut because of area foreclosures.

“We have giveaway prices at this point. If it’s not a giveaway price, it’s going to sit there,” Bulthouse told TransActions.

She said she is seeing more rental homes available with most of them managed by owners. Bulthouse noted there are a lot of programs to help tenants pay their rent.

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TAGS:

• alt realtors and property management
• chris mcguigan
• cindy larsen
• community foundation for muskegon county
• dave medendorp
• mia & grace bakery bistro
• muskegon
• muskegon area chamber of commerce
• pure michigan