The Facts about Blight and Restoration<\/h2>\n
Depending on what you read about Detroit, you’ll either read a lot about how the city is bulldozing another 10,000 empty houses to combat blight, or that the city is rising like a phoenix from the ashes thanks to the efforts of billionaire Dan Gilbert (and the people who have allied themselves with him). The truth is, they’re both right.<\/p>\n
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Detroit is currently about one-third downtown and midtown, which are the areas getting big money from big, eager investors. It’s also about one-third blighted wasteland, with an estimated few thousand families squatting in abandoned, slowly rotting houses. But the final third of Detroit is what I call Opportunity Land, where the costs are low and the returns are high. Opportunity Land is our playground.<\/p>\n
The Art of Minimizing Risk<\/h2>\n
The downside to a low-cost, high-return environment is the high risk that comes with investing in inexpensive rental properties. There are a lot of risks, and while we go too into detail, the short version is that you should watch out for:<\/p>\n
\u2022 Properties that are cheap in cost but have significant hidden costs like disputed titles, unrevealed tax liens, or damaged substructures
\n\u2022 Jerks that break into houses and steal anything sellable\u2014or just move in and squat
\n\u2022 Contractors that only work for cash, have addiction problems (making them unreliable), or are too expensive to work on an inexpensive property
\n\u2022 Bad tenants moving into perfectly good properties and ruining them
\n\u2022 Good tenants who have an economic setback they can’t recover from
\n\u2022 And a city government that demands a lot but provides little\u2014police never get there!<\/p>\n
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