Wait before you spend a penny investing in Detroit!!!
Almost Turkey day, and I figure before we devour so much food that our stomachs start to cramp to release a new post. I just could not wait any longer to lay out basic things on what not to expect and do when investing in the great city of Detroit.
1. Every street is different not Neighborhood
Investors like to check by neighborhood or zip code to evaluate the market which works in most cities but not so well in Detroit. Detroit is a case by case study with the buying criteria so evaluate by STREET not by the neighborhood and I mean that literally. One street can give you that warm and fuzzy feeling inside then turn right and right again to the next street and your rolling down your windows and lowering your music.
2. Have more than 2 for everything on your investing team
If you think your are in good shape with 1 property manager, 1 handy men, 1 realtor please rethink your team. Detroit requires a tolerance level, market understanding, and as many eyes as possible than most states. I have read about property management companies closing down, realtors doing business in higher priced cities, and handy men who quit mid job for reason that are head scratchers. When investing in Detroit, be sure to have more than 2 of every job title related to your investing style and team.
3. BRRR Strategy
I have years of refinance banking experience, I have done over $10 million in revenue and closed loans in over 20 states. I live in Michigan and it is one of the toughest states to refinance in, especially Detroit. The #1 reason the BRRR strategy is successful is because it uses the equity in your home to buy another and repeat. What if you have no equity? That is majority in Detroit. Home values are not high enough to pull any money out because a lot of homes barely are worth $30,000 and banks have a hard time loaning money in Detroit.
After reading this, I am sure I have either scared the pants off you or you left the page before you made it to #2. I invest in Detroit, big hedge fund companies are spending billions in Detroit, and you see the publicity in the news about our city growth so it has to be an advantage that we see, that others don't? You guessed it! I will show you all the best reasons to invest here and why you should.
Comments (7)
@Jamiel Strickland great article! I’m considering tapping into Detroit and originally had BRRRR in mind. Glad you brought up points why not to. Buy and hold is in my mind now, but being out of state, what are your suggestions for developing good local relationships?
Constance Kawa-Small, over 4 years ago
@Constance Kawa-Small,
Biggerpockets have helped many people I work with out of state and also taking a mini visit and setting up appointments to others one on one to meet these people face to face and also see what it looks like and your own view. If you plan the small trip here I would do it on a day where theirs a REI meeting happening where it is a lot of people in one room where you can meet and greet and build relationships. With you being apart of the BP family I will always help you with referrals or help with anything with investing here,
Jamiel Strickland, over 4 years ago
Thanks for the advice, I was planning on heading out for a meet up. I’m ALWAYS open for referrals!
Constance Kawa-Small, over 4 years ago
Great Read, i'm from the city myself and cant wait for the new changes!
Rafie Ahmed, about 5 years ago
@Rafie Ahmed, Thanks for the read! They are coming fast in Detroit.
Jamiel Strickland, about 5 years ago
Parts of Detroit are coming back big time. But mostly neighborhoods near downtown.
Brian Ploszay, over 5 years ago
Mostly neighborhoods downtown, BUT many other neighborhoods are seeing some big improvements. It doesn't show on media outlets but if you live here and invest here you know some of the hidden gems to invest.
Jamiel Strickland, over 5 years ago