Detroit??? Has anyone been purchasing there? Why, Why not?
West Palm Beach, FL · Member since 2015 · 5 posts · 0 votes
Hi Everyone,
Just Curious is anyone picking up property in Detroit? if so why? if not why?
I love Detroit. It is an incredible city. Don't believe the standard media memes. The place is booming, but it varies almost block to block. Yes, there are $5 sfh worth negative amounts by the thousands. But also areas where you can get 18% yield with a likely 200% equity increase on top.
some of the comments here are just plain ignorant and offensive.
And yes, unlike many, I live here.
V
Can someone offer any information suggesting that Detroit's schools are turning around? Because without that, a few hipster millenials and a new hockey arena aren't going to matter.
I could see Detroit turning around, if they demolish roughly a third of the housing stock and turn around the schools. The first is underway. Is the second?
What major city is known for great public schools? Not NYC, not Chicago, not Philly, not LA, not DC, ... and not Detroit. People with kids who choose to live in major cities either seek out the handful of good public schools, enroll their kids in private or parochial schools, or homeschool. As important as schools are, the quality of the overall school district in major cities isn't the impediment to people moving in that some seem to think it is.
I know educated parents who live in Detroit by choice and their kids are getting a great education at one of good public schools or at a private or Catholic school. So that's not the obstacle. On the other hand, safety certainly is. As are the higher costs of home and auto insurance, property taxes and city income taxes.
There used to be a valid concern about where to shop in Detroit, but there are a lot more options now for groceries, clothes, restaurants, bars and entertainment than there were. Living in the city of Detroit can be a viable option for families who seek the bright city lights.
There is a significant difference between "not great" and "third world." And some cities (boston for example) do have excellent schools.
I did some research. Looked at East English Village Prep, for example. Brand new school, significant investments made. By all accounts in the top third of Detroit's 18 public high schools. And dreadful result. Dreadful. Would be the worst school in my state by miles. College readiness score of 3.1. My rural NH district is at 29. EEVPA had zero kids pass an AP exam last year. Zero.
I guess you have answered my question for me. If, when asked for proof a city's schools are turning around, that city's boosters answer with, "Schools don't matter!", that does answer the question.
I'm not a Detroit naysayer. But the suggestion that middle class families care more about auto insurance rates than schools is ludicrous, and if that is all you've got, you should just pack it in.
Of course, I never said that "middle class families care more about auto insurance rates than schools". I said that "the quality of the overall school district in major cities isn't the impediment to people moving in that some seem to think it is." What I think you're missing is what I explained, that families that want to live in the city figure out how to get their children an excellent education, despite the city's overall school district being poor.
They don't just send them to the local neighborhood school if that school isn't good enough. For example, in Detroit, they'll look to send them to Chrysler Elementary in the Lafayette Park area (where I lived, incidentally, when I moved from Boston to Detroit 25 years ago), or Bates Academy in the Palmer Woods/Palmer Park/University District area, or the private Waldorf School in the Indian Village neighborhood. Or any number of other private schools, or they'll avail themselves of the "Schools of Choice" program and enroll them in a suburban school.
For high school there's Renaissance High (24.8 college readiness score despite most students coming from poverty), U of D Jesuit or a number of private schools like Detroit Country Day or Cranbrook (where Mitt Romney attended).
The point is, there are ways that educationally-oriented families get it done, in Detroit as well as in the other major cities, and the poor school system isn't the main factor in city-oriented people not moving into the city. Boston, by the way, wasn't full of great schools when I lived there nor is it now. Like all the big cities I'm familiar with, there are a handful of good schools but the majority are fair to poor. To wit, this is Boston, with plenty of red and yellow rated schools:
And this is Detroit:
Looks like Boston is a little better, but most neighborhood schools in either city aren't ones I'd gladly send my children to.
BTW, I don't consider myself a Detroit booster. Most of my commentary on the city involves telling people to stay away; that unless you've really done your homework as an investor you'll be eaten up and spit out. And a $1,000 house can be overpriced. But at the same time, I'll dispute what I see as inaccurate negative assumptions from those less familiar with the city.
Looks rather dramatically better to me.
Yes, I am sure there are a few good schools in Detroit. Yes, private schools and homeschooling are options for some. Yes, those who really want to live in a particular place can make it work, despite bad schools.
But let's not pretend that the "middle class families in nice SF homes" referenced earlier are sending their kids to Cranbrook. And in the case of Detroit, why would people want to live there badly enough to go to great lengths to obtain decent educations for their children? Why not simply live in a place where that is available as a matter of course?
Every city needs a base of middle class families in order for gentrification to take hold. Every city. Even SF, Seattle and Portland were never just about young, single hipsters.
If Detroit is able to raze about half its buildings, creating substantial green space while arresting blight and increasing prices through restricted supply, while also addressing its schools in a meaningful way and becoming significantly less crime-ridden, it may well come back with a vengeance.
If instead it makes some small progress on each of those fronts, it may come back in some small way.
Either way, its days as a city of more than a million are almost certainly done.
I take your point about local knowledge. On the other hand, a real estate agent in a particular area is not necessarily the most unbiased source of information about an area's prospects long-term.
I understand when there is blood on the streets then you buy property (Warren Buffet), but when it comes to those circumstance it means you also have to be extremely careful. Remember it wasn't too long when Detroit went bankrupt. Unless you are in that particular area and you know the market like the back of your hand, or you are dealing with a very reputable company it could be a bit dangerous. I know people who have invested in that particular region and came out successful, but if you can get involved in other areas that have stronger economic indicators for growth with a stronger type of demographic where you can see a consistent return that are around the same price point... why not?
Remember, never get attracted to investment just because it looks good on paper.
Mardochee Pierre :
It took 50+ years to bring down the city of Detroit and you feel it can be fixed in a Decade ? Keep Dreaming .
Interest and Potential money being invested , People willing to spend Billions and Millions ? Of whose money ? certainly hope it is NOT TAX money you are referring to . In the Grand Scheme of Social Engineering that certainly did NOT work out too well did it ? You are somewhat correct though that reguardles of which metro area you are talking about D neiborhoods or war zones , the citizens should take responsibility for letting that happen
Go ahead Invest in your city I will take my money elsewhere .
Regardless of what you think and I think. Numbers are what's going to change Detroit, for every argument that a person had against New York there was an investor. Miami was the Drug capital of the U.S. for a long time and it still has high crime and it has risen from the ashes. Miami still till is still a tourist destination.
In regards to Gentrification and real estate development...there has been and continues to be new real estate development and small pockets of gentrification happening in Detroit .2ndly, magnet schools are once again not the reason for the success of it's education...but the allocation of funds. Also There are currently about 116 magnet schools in all of NYstate....don't need to tell you how many public schools there are here so yes charter schools make a difference but it's not solely because of charter schools.
As per crime please take a word from Detroit Police Chief James Crai May 20th 2015-
“You’re seeing it now. We haven’t gotten there yet. When you look at our crime reduction, here we are today 61 percent reduction in homicide. Last year at this time, Detroit had 20 homicides and we are right now sitting at 11. That’s dramatic. Violent crime in the city is down 27 percent. Property crime is down 38 percent. In overall crime there is a 35 percent reduction.This is not an accident and you have people saying, ‘I do feel safer.’ In fact, the areas that we have targeted for enforcement, that’s just not a random response. It was very strategic based on the data, areas recognized as some of the most violent zip codes in America.”
Now this not to say Detroit isn't violent or bad place to invest to some. But to paint Detroit with a broad brush because you haven't done your due diligence with the numbers or statistics is a mistake on your part. The other thing is with new investment , more money , increase in tax base things eventually change. So yes Detroit is still crime ridden..but as per the latest crime results it is own the way down.
Now to get things back on track a bit, it is obvious that the city has identified certain areas it is going to try to save, and other areas that will be left to rot until they can be bulldozed. They aren't very forthcoming about which is which, but you can look at where the land bank chooses to list houses for sale rather than knock them down, plus where DPS has put money into school buildings, and get a pretty good idea.
So at the very least, can we agree that anyone considering buying in Detroit should confine themselves to those areas?
IF,and it is a big if, I were ever to invest in SFRs in Detroit and couldn't afford an actual GOOD neighborhood, I would be buying in East English Village, where there are in fact houses I could see cash-flowing in the short run and appreciating slightly in the longer run.
So, Detroit peeps, am I crazy? Remember, the variable here is assuming that the investor could not afford Corktown, etc.
Another point is the reliance on a single industry was Detroit's demise...
it takes local, boots on the ground. The haters can keep there money elsewhere, fine with me. Prices are already skyrocketing with lots of east coast money pouring into the city now the bankruptcy is behind us. They have seen this movie before - in ny, philly, NJ - and they figure they know the ending. Lots of money for those who get in early.
the biggest problem in some areas is a lack of inventory. so, to address the original point, yes. There is huge money to be made. But as an out of state passive investor, go elsewhere. Or stick to the burbs, otherwise known as detroit metro.
I think it's about time someone answered the forum question. Yes, I am investing in Detroit. In fact, I just closed on a property in Detroit on Friday. I've managed a duplex in a nice Detroit neighborhood for the last 10 years while purchasing several buy and hold rentals in the metro-area. Lately I have been focusing on Detroit proper more than before. I purchased my first in the city (a nice brick ranch) in November and found a great tenant quickly and the numbers on the deal have been very strong. While I have accumulated a portfolio of several properties in the Detroit suburbs (where I live), I have been focusing more within the city as of late. My newest property has me very excited and I hope to have it filled within the next week or two. Attached are pictures of my two Detroit properties (the brick one was from November, and the green one is from Friday). The brick home is delivering a 36% cap rate and the green one I expect to be slightly higher. You have to know what you're doing in the city. I don't recommend anyone invest in any city unless you're local. For those that live here, consider yourselves lucky to be investors.
Hi Everyone,
Just Curious is anyone picking up property in Detroit? if so why? if not why?
Why would you bother with Detroit when the Florida market is pretty much destroyed - and people actually want to be in Florida (even if it is just the crazies).
Or you could buy property in the cold north where no one wants to live in a Democrat hell hole.
Not sure I understand the comment " When the Florida Market is pretty much destroyed ?" Can you comment on that further please ?
Perhaps I am one of the Crazies LOL but I see the state of Fla ,Certain parts of Tex and Arizona as being " Gods Waiting Room " To me a majority of the Fla State economy is based on Retirement , Hospitalty , Tourism and Service industrys . Typically Low paying Jobs to begin with . I just don't see much Major Mfg being done there . Most of the Snowbirds generally are in the upper middle income are and have the means to do such . The Permanent retireres really don't have the means to improve there lots in life .
All the major cities Jax , Orlando , Tampa , Miami have there A , B, C, and worse neighborhoods Drugs , Single Parents ,Gangs the lists go on as to the reasons why .
For the investors I think there is still quite amount of oppurtunity there .but from what I have seen and heard it is hard knowing there are 10 other people trying to chase down the same deal .
For the Non Investor Young couple starting out in life sometimes it is tough to make ends meet .living there .
Old Farts like myself staring 70 in the eyeballs Don't really want to live in Cold North year round nor a Democratic Hell Hole . I tell this to my kids and Grandkids all the time . The America I grew up in is Not the America I know today .very sad .
I guess you can tell my conservative voting tendencies LOL When first got married we each worked 2-3 jobs typically $2-$3 per hour just to save up for a down payment on our first house . How many youths today do you know doing the same thing . Society now dictates we live in the Give Me Give Me and being Politically Correct at all times world .
So much for Social Evolution . I have no problem helping people with their NEEDs .I do have a problem helping them with their WANTs . Anybody on here get there NEW OBAMA PHONES lately ? You can tell we are in Deep Trouble when the "People " elected this WORTHLESS POS for a second term !! again very sad .
Well RUSH is over I think I will take a Break , Relax and watch FOX News . LOL !!
Detroit is a market very unique. It has pockets and sometimes deals are street by street. With the right help you can find the right deals and be able to fix and sell or fix and hold to build equity and receive monthly income.