0 Foreclosure Man

Since the very beginning of the real estate crisis, there has been a glut of bank-owned homes on the market in Michigan. Although that spells bad news for the people who lost them, it can be a veritable gold mine for people who have the means to buy them. Under normal circumstances, a real estate investor might pick and choose a handful of foreclosed properties, renovate them and flip them for a profit. The other popular option is to rent them out to tenants. One Michigan man has made a real splash: He bought a whopping 650 foreclosures at one time.

Just Call Him the Foreclosure Man

71-year-old Bill McMachen is far from an experienced real estate investor. Until 2001, he'd never purchased a foreclosed property in his life. On a whim, he decided to buy a bank-owned property for $12,000. Shortly thereafter, he sold it for a cool $18,000. Inspired by the quick and easy nature of the transaction, McMachen started thinking. The more foreclosed properties he bought, the more he stood to make. Unlike many would-be investors, McMachen had a decent amount of money at his disposal. He decided to find a way to put it to good use.

A New Way to Make Money

McMachen earned his fortune by selling yachts. Not surprisingly, the yacht industry hasn't fared very well since the economy took a nosedive. Instead of accepting the situation, McMachen had found a new way to make money. Clearly, a higher volume was going to be needed to make the venture as profitable as possible. When he saw an advertisement for a bank-owned property auction by Macomb County, he couldn't resist. The auction was to include 650 tax-foreclosed properties. McMachen was in, but he just had one question: Could he just buy all of them?

An Auction to Remember

Although county officials had never seen it happen, they told McMachen that there was no reason that he couldn't just buy the entire lot of foreclosed homes. The asking price, $4.8 million, was the total of the amount of back taxes that were owed on all of the properties in question. At an average price of just over $7,300 per property, McMachen would be getting them for an absolute steal. Instead of drag the process out, he went ahead and bought the entire lot in one fell swoop.

What's Next?

The properties that McMachen snapped up at the Macomb County auction included 403 single-family homes, 120 residential lots, 14 condominiums, nine commercial buildings and some undeveloped land. Not surprisingly, people were immediate curious about how McMachen was going to handle all of those properties. From the very start, his plan was to sell them to investors for a profit. However, he wanted to give back to the community too, so he plans to donate some of the homes to needy families. Unlike when buying foreclosed homes at an auction, however, he's going to give investors the opportunity to inspect them and see the property for themselves to find the perfect house that suits them before buying them.

Properties are Flying off the Shelves

As overwhelming as suddenly coming into 650 properties may sound, McMachen has handled it gracefully. In fact, he unloaded 181 in one week and another 150 in another week. According to him, all of the properties should be off his hands shortly. As it happens, people are hungry for investment properties. Of course, people who want to buy and live in them can do so as well. With the right mortgage loan, it's possible to become a homeowner for very little money. There's no word on whether McMachen will buy another batch of properties, but it's clear he's discovered a new career.