Another post on how much Detroit sucks?
Residential Real Estate Agent · Rochester, MI · Member since 2012 · 152 posts · 52 votes
Another post on how much Detroit sucks?
Most Popular Reply
Realtor · Detroit, MI · Member since 2013 · 278 posts · 114 votes
11yI would suggest that anyone looking to invest in Detroit make a trip out to see the city for themselves. There is no one size fits all strategy for Detroit or any other market.
There are areas prime for redelopment but that depends on your pricepoint.
If you have the option to buy a $1,000 pair of shoes or house. Please buy the shoes. At least you can take them back if you change your mind.
56 Replies
- Castlewood, VA · Member since 2012 · 177 posts · 57 votes11y
Parts of Detroit Proper are awesome. Other parts suck so bad it's off the suck scale. I can't think of a city where this subjective metric does not apply.
Detroit Metro suburbs are nice and that's where the best investments, my opinion only, can be made.
- Flipper/Rehabber · Clinton Township, MI · Member since 2014 · 71 posts · 12 votes11y
Hi @Matt Cramer
When they say Detroit, they are mainly referring to the city itself. Although it realistically is not as cut and dry as saying the whole city is not investor friendly. You are right, there are definitely some investors investing in the city of Detroit and it is definitely area dependant within the city. And there are even more investing in the suburbs. I still consider myself a beginner investor so I personally prefer to invest in the suburbs.
- Residential Real Estate Agent · Rochester, MI · Member since 2012 · 152 posts · 52 votes11y
I have been looking at a few places in the suburbs and checked the rents out, drove through the areas etc. They seem like some great properties. (auburn hills area) I obviously don't want the $5 houses, those area scary places and I value my life. However I wonder how someone might be able to make money with those types of properties? Do they buy up blocks and blocks and just wait the depression over there out?
- Flipper/Rehabber · Clinton Township, MI · Member since 2014 · 71 posts · 12 votes11y
And not to throw @Joshua D. under the bus but I think it's mostly Josh over Brandon who bags on Detroit haha. Can't blame him based on how much Detroit and the politicians were in the news a couple years ago. Seems to me that the city itself is definitely on the upswing tho.
I'm only through podcast 50 and it sounded like Josh starting to love on the city during one of those podcasts. Can't wait to see how that love blooms as the podcasts progress. Haha
- Realtor · Detroit, MI · Member since 2013 · 278 posts · 114 votes11y
I would suggest that anyone looking to invest in Detroit make a trip out to see the city for themselves. There is no one size fits all strategy for Detroit or any other market.
There are areas prime for redelopment but that depends on your pricepoint.
If you have the option to buy a $1,000 pair of shoes or house. Please buy the shoes. At least you can take them back if you change your mind.
- Investor · Howell, MI · Member since 2011 · 202 posts · 52 votes11y
I don't understand the need to convince the BP community or anyone else for that matter, that Detroit or SE Michigan is a good place to invest. If you have a business model that works in Detroit or the inner ring suburbs, then do it. All the validation that should be necessary are the returns you're making. I'm making great returns by investing here and I want to continue doing so. Values continue to go up and I've already got more competition than I care to have.
So to all investors out there please be advised, our market SUCKS!
- Investor · Detroit, MI · Member since 2014 · 755 posts · 462 votes11y
I'm glad you hate Detroit!
- Investor · West Bloomfield, MI · Member since 2009 · 358 posts · 306 votes11y
I wouldn't mind Detroit staying under the radar for a while longer. Plus, the bad reputation keeps less savvy folks out of market which is good for them and for the city/area. There's no shortage of folks flying in to check things out.
- 11yMindy JensenPro MemberBiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
@Joe Mazur, keep listening to the Podcasts, but Josh doesn't all of a sudden fall in love with Detroit.
The biggest problem I see with investing in Detroit is the lack of knowledge for far-away investors. Like most big cities, Detroit changes street to street and even block to block. If you aren't there, you have no idea. Buying a house for $1,000 seems like you can't lose, but with those $1,000 houses come back taxes and in some cases, immediate foreclosure proceedings against the new owner.
I am so happy to hear people are making money in Detroit. I wish you the best of luck there. But I am equally happy to hear you warning other people with less knowledge of the area to stay away. If you aren't intimately familiar with Detroit, or have someone you implicitly trust who is, then the Detroit market isn't for you.
At the height of population in the 50s or 60s, Detroit had 1.7 million residents. Now they have 700,000, and shrinking every year. There are just too many houses.
- Real Estate Investor · Madison Heights, MI · Member since 2014 · 693 posts · 216 votes11y
Originally posted by @Matt Cramer:
I have been looking at a few places in the suburbs and checked the rents out, drove through the areas etc. They seem like some great properties. (auburn hills area) I obviously don't want the $5 houses, those area scary places and I value my life. However I wonder how someone might be able to make money with those types of properties? Do they buy up blocks and blocks and just wait the depression over there out?
They don't make money with those types of properties. I am known as the local Detroit hater on BP. That's not all true. What bugs me is the out of state people thinking they know more about Detroit than the locals do. These very same people try to buy these houses off of ebay with the thought how could they possibly lose money. LOLOL
These are the properties that are destroying the city. They buy them and figure out they are screwed so now we have out of towners just letting properties rot. I try to discourage these people from buying into the city.
I would only flip in Detroit. I would have no interest in renting in the city. The taxes are bad and you can never tell when that "block" is going to turn to garbage.
Flip in Detroit and rent in the burbs.
I hate to seepeople get screwed on these properties and just sit on them and let them rot
- Specialist · Kiryat Motzkin, Israel · Member since 2014 · 266 posts · 159 votes11y
I couldn't agree with @Mindy Jensen more.
Another big problem with Detroit is all sorts of unscrupulous "turn-key" companies and others, preying on unsuspecting foreign investors who have no idea what they are getting into.
I know, I was one of them, - To my benefit I can say I was one of the cautious ones who did do their homework, and thus landed up buying in relatively good areas.
Having said that, and even with the knowledge that I probably overpaid for my first two properties, I am still getting a good return and have gone on to buy more properties in Detroit.
Like anywhere (and in Detroit more so than other place) it is really all about the people you are working with on the ground, and the local knowledge you have or have access to. - Corona, CA · Member since 2014 · 154 posts · 100 votes11y
Follow what Dan Gilbert is doing to downtown Detroit....
Inventors from all over are going there buying up properties near downtown. There is a system that works in Detroit, but the catch for most successful investor in the midwest, you almost have to be the hometown guy thats popular and lovable. Grew up there, and respected. I worked with a guy for some time that has tons and tons of rental properties throughout of Detroit, and ill just say he hasnt worked in decades. Hes live a good and very comfortable life. 99% of the people that speak on Detroit on this site have never stepped foot in the city to know what it really like.
Now follow me im not saying its a great place to invest, personally i chose not to invest there, i chose Northern Indiana, which is very similar to the current state of Detroit housing. I just took his system and put it into place. If you dont plan on going there and spending time there, really getting to know the area, then walk away....There are easier and better ways to invest your money and time. If its cost less than a honda run...
- Real Estate Investor · Madison Heights, MI · Member since 2014 · 693 posts · 216 votes11y
Originally posted by @Jason Farmer:
Follow what Dan Gilbert is doing to downtown Detroit....
Inventors from all over are going there buying up properties near downtown. There is a system that works in Detroit, but the catch for most successful investor in the midwest, you almost have to be the hometown guy thats popular and lovable. Grew up there, and respected. I worked with a guy for some time that has tons and tons of rental properties throughout of Detroit, and ill just say he hasnt worked in decades. Hes live a good and very comfortable life. 99% of the people that speak on Detroit on this site have never stepped foot in the city to know what it really like.
Now follow me im not saying its a great place to invest, personally i chose not to invest there, i chose Northern Indiana, which is very similar to the current state of Detroit housing. I just took his system and put it into place. If you dont plan on going there and spending time there, really getting to know the area, then walk away....There are easier and better ways to invest your money and time. If its cost less than a honda run...
This is one of the dumbest post ever in the history of BP. HAHAHAAAHHH OMG people what were we thinking. Now we have it all figured out. We all should just do what a billionaire does and everything will be fine. HAHAHAHAHAHAHAH Oh ok I'll get right on that.
First I will just open a mortgage company sell garbage loans make millions than I will buy every downtown building I can get my hands on for 20 cents on the dollar and hey I'm still bored to death so let me buy the Cleveland Cavs. Also has so many start ups that now they can rent space from me in my downtown buildings.
Some of the things I see posted on BP just kill me. Most people that are on BO are small time investors with less than 10 properties and are trying to figure out how to get more or trying to figure out how to get started. But yet here this guy has it all figured out. Just do what a billionaire does and everything will be fine.
- 11yEngelo RumoraBusiness MemberInvestor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
Originally posted by @Matt Cramer:
I keep hearing about how much Detroit is the worst etc on the podcast. I have a feeling it's mainly being referred to as the scams that go on there and the people who take advantage of new investors.
So rather than saying Detroit is the worst you can't make an honest buck there, I'd like to hear some peoples opinions on HOW you can invest in the Detroit area and do well.
I'm moving to the area (about 45 minutes North) and I refuse to believe there aren't great investment opportunities there where you can safely make an honest living in flips, buy and hold etc.
We gotta give Detroit some love. I like to think opportunity is everywhere and you just have to find it.
Thanks for sharing Matt,
I'm still waiting for a good candidate to show me the outskirts of Detroit.
Although a long way away from any recovery IMO, I'm an optimist and would love to expand our business into Michigan within the next years...
Any volunteers? lol
I'm happy to check out the ghetto also just for giggles lol
The Detroit ghetto is one of few nationwide that I haven't yet checked out.
Thanks
- Real Estate Investor · Madison Heights, MI · Member since 2014 · 693 posts · 216 votes11y
Originally posted by @Engelo Rumora:
Originally posted by @Matt Cramer:
I keep hearing about how much Detroit is the worst etc on the podcast. I have a feeling it's mainly being referred to as the scams that go on there and the people who take advantage of new investors.
So rather than saying Detroit is the worst you can't make an honest buck there, I'd like to hear some peoples opinions on HOW you can invest in the Detroit area and do well.
I'm moving to the area (about 45 minutes North) and I refuse to believe there aren't great investment opportunities there where you can safely make an honest living in flips, buy and hold etc.
We gotta give Detroit some love. I like to think opportunity is everywhere and you just have to find it.
Thanks for sharing Matt,
I'm still waiting for a good candidate to show me the outskirts of Detroit.
Although a long way away from any recovery IMO, I'm an optimist and would love to expand our business into Michigan within the next years...
Any volunteers? lol
I'm happy to check out the ghetto also just for giggles lol
The Detroit ghetto is one of few nationwide that I haven't yet checked out.
Thanks
I'll show you. I hooked up with your fellow Aussie (Frank). He can ouch for me. I can't wait till he gets back and we can gte rolling right here in Detroit. Just let me know. I enjoy i
- Ira Township, MI · Member since 2015 · 57 posts · 17 votes11y
Originally posted by @Matt Cramer:
I have been looking at a few places in the suburbs and checked the rents out, drove through the areas etc. They seem like some great properties. (auburn hills area) I obviously don't want the $5 houses, those area scary places and I value my life. However I wonder how someone might be able to make money with those types of properties? Do they buy up blocks and blocks and just wait the depression over there out?
No offense, but I think you need to do more research about the "area" you want to invest in. Auburn Hills is about 45 minutes out from Detroit, and is a completely different animal. Each city outside of Detroit's city limits is different from the next. Different demographics, medium income, school systems, crime rate, etc. Also, there is a huge difference between Wayne , Macomb, and Oakland County.
- 11yEngelo RumoraBusiness MemberInvestor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
Originally posted by @Scott K.:
Originally posted by @Engelo Rumora:
Originally posted by @Matt Cramer:
I keep hearing about how much Detroit is the worst etc on the podcast. I have a feeling it's mainly being referred to as the scams that go on there and the people who take advantage of new investors.
So rather than saying Detroit is the worst you can't make an honest buck there, I'd like to hear some peoples opinions on HOW you can invest in the Detroit area and do well.
I'm moving to the area (about 45 minutes North) and I refuse to believe there aren't great investment opportunities there where you can safely make an honest living in flips, buy and hold etc.
We gotta give Detroit some love. I like to think opportunity is everywhere and you just have to find it.
Thanks for sharing Matt,
I'm still waiting for a good candidate to show me the outskirts of Detroit.
Although a long way away from any recovery IMO, I'm an optimist and would love to expand our business into Michigan within the next years...
Any volunteers? lol
I'm happy to check out the ghetto also just for giggles lol
The Detroit ghetto is one of few nationwide that I haven't yet checked out.
Thanks
I'll show you. I hooked up with your fellow Aussie (Frank). He can ouch for me. I can't wait till he gets back and we can gte rolling right here in Detroit. Just let me know. I enjoy i
Whats your email mate?
Thanks
- Investor · SE, MI · Member since 2013 · 1k+ posts · 461 votes11y
I'll agree with the previous poster- the biggest issue for out of town investors here is the lack of knowledge on the area.
I have lived my whole life in the metro area, my parents were born and raised in Detroit (moved out with the white flight) and I still don't feel I know enough to start sinking money into it RIGHT NOW. We are waiting, investing in other areas for the meantime, but plan to jump in when the time is right for us ;)
- Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes11y
I have never seen a Detroit booster answer this simple question:
Detroit has housing stock built to house 1.5 million people. Today, the population is half that, and falling. How is it possible for that market as a whole to "bounce back" without demolishing thousand and thousands of houses?
I recognize that hundreds of blighted properties have been demolished. But what is needed is to eliminate entire neighborhoods.
The surplus housing of the city of Detroit could house the entire population of Boston. Think about that.
- Residential Real Estate Agent · Rochester, MI · Member since 2012 · 152 posts · 52 votes11y
Originally posted by @Account Closed:
Originally posted by @Matt Cramer:
I have been looking at a few places in the suburbs and checked the rents out, drove through the areas etc. They seem like some great properties. (auburn hills area) I obviously don't want the $5 houses, those area scary places and I value my life. However I wonder how someone might be able to make money with those types of properties? Do they buy up blocks and blocks and just wait the depression over there out?
No offense, but I think you need to do more research about the "area" you want to invest in. Auburn Hills is about 45 minutes out from Detroit, and is a completely different animal. Each city outside of Detroit's city limits is different from the next. Different demographics, medium income, school systems, crime rate, etc. Also, there is a huge difference between Wayne , Macomb, and Oakland County.
I was referring to Detroit Metro which encompasses most of the area you posted I believe.
I'm moving to the Rochester area and intend to invest in the area around Detroit within an hour or so. I'm still learning about the different areas, strategies etc. I'd love to hear what some of the people having success in the metro Detroit area are doing?
- Realtor · Detroit, MI · Member since 2013 · 278 posts · 114 votes11y
@Richard C
The city is tearing down 100-200 houses a week. What is needed to eliminate entire neighborhoods is a major redelopment plan and eminent domain.
- Realtor · Detroit, MI · Member since 2013 · 278 posts · 114 votes11y
That video was recorded last year. There is over 40 sq miles of vacant land in the city. These neighborhoods will not be rebuilt unless there is a significant reason to do so. Such as relocating the city airport, moving the zoo back into the city. It is land locked in Royal Oak and can't expand. If they decide to build a version of "Wayward Pines" here.
These are the areas that @Scott K are referring to when he says he is trying to help out of town investors to stay away from.
- Investor · Indianapolis, IN · Member since 2009 · 178 posts · 26 votes11y
You make money in any market you just have to use the correct strategy.
- 11yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
that is the crux of the matter... when jobs leave people leave with them and like we have out here in the West.. ( Ghost Towns) its just normal commerce at play. And the fact that owning rental homes has gotten into the main stream of every day US citizens of owning them.. there is intense interest in this.. Along with the foreigners who in many cases get absolutely hammered not knowing what we know here in the US. Not a week goes by when I am not contacted by some off shore investor wanting to know what to do with their turn key dud and its not all Detroit.. but there is still plenty of this type of thing going on for sure. case in point I just funded a 8 home package in another prominent turn key mid west market.. the sellers were all AU investors who after years of not being able to make it work from their arm chairs in AU sold out at 70% CASH loss's per property.. these transactions equated to over a 250k cash loss for those AU investor. Its really the low end product that gets recycled like this.. the new buyer will do their thing and new owner will come in and the cycle repeats.
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