Investing in detroit

18 Replies

Hello Everyone,

I am planning to invest in Detroit, I am currently from denver where the population keeps increasing and the prices dont drop from the 100k mark. I want to invest in the fitzgerald area as i have found some great properties in that area that can be rehabbed and rented out. 

What would you guys recommend? 

I thought you had some of the best markets right there in your area?

As far as Detroit... you probably heard about the low costs and high yields. There's a reason for this. 

I moved back to the metro area not long ago. 

I don't want to throw shade on the city, and there are definitely people making profit (at least for now) in the city proper.

All I'll say is, be very thorough in your research so you have as complete an understanding of the demographics as possible. You'll see a clear property value pattern in the city and what has been driving it. Don't forget to get an understanding of the history that lead the city to where it's at. 

e.i.  800/mo rent on a 25k, 100 year old house in an area with a median income of 25000/year with demographic problems is the very definition of high risk. At least then, you'll be in a better position to ask yourself if the yield and everything else involved fits your life plans and risk tolerance levels. 

 

@Ashley Correa there are probably over 1,000 posts on that very topic here. Do some reading of those posts. I would say don't do it. I would also say the odds are you have less than 1% chance of success. You would be better off figuring out how to buy local (seller carry, low downpayment loan programs, partnering etc) with the money you do have and have a much much higher chance of success.

If you do it, your property manager is the key to success or failure. Find that first and then follow their advise as to where to buy. 

Hi Dj M,

i am looking to purchase in detroit from Australia. Sole reason being yield,

The area is just next to sherwood forest palmer woods. I believe the entry point is about 3ek, 8.5k rehab and 900 per mo th expected rent. This is all through a buyers agent,

what are your thoughts about this deal?

regards

Originally posted by @Ashish Malhotra :

Hi Dj M,

i am looking to purchase in detroit from Australia. Sole reason being yield,

The area is just next to sherwood forest palmer woods. I believe the entry point is about 3ek, 8.5k rehab and 900 per mo th expected rent. This is all through a buyers agent,

what are your thoughts about this deal?

regards

Sherwood Forest and Palmer Woods are in the 300-700K range and some of them can go for 1M +

They are the top crop of Detroit, 

followed by Detroit Golf, UD and EEV.

Expensive neighborhoods. For eg This one is listed for 809K (been on the market for a while)

https://www.realtor.com/realestateandhomes-detail/1701-Balmoral-Dr_Detroit_MI_48203_M39251-61543?view=qv

http://alyssachia.info/big-house-in-the-woods/big-house-in-the-woods-palmer-woods-mansion-finally-ready-for-its-big-sale-asks-650k/

 

Originally posted by @Ashley Correa :

Hello Everyone,

I am planning to invest in Detroit, I am currently from denver where the population keeps increasing and the prices dont drop from the 100k mark. I want to invest in the fitzgerald area as i have found some great properties in that area that can be rehabbed and rented out. 

What would you guys recommend? 

Fitzgerald is Okay, not the best of areas, still has a way to go with the Blight demolition as the City is tackling 

- Location 4 out 10 

 

@Ashley Correa ,

I am from Detroit area and invest here in Detroit. I really enjoy it, really good cash flow and I have a team now I can depend on. I do like the Fitzgerald area but its others that makes sense. One of my investors have a property close to their so if you have any questions I can answer and help you out. BTW I love Denver lol!

Hi Ashley,

I am in the process of closing on two houses that I plan to rehab and rent out in Fitzgerald. I do understand that there is a lot to be done in the area but there is a revitalization plan for that particular area so I am taking a gamble on it! I agree that the neighborhood is not far from Detroit Golf, University District and Sherwood Forest which are all kept up quite well. I just visited the neighborhood two weeks ago and there is a lot of rehabbing currently going on which looks promising! I would love to have the opportunity to connect with other Detroit investors, both local and out of state!

@Ashley Correa Stay away from the Fitzgerald are unless you are NOT interested in making money now. That area is challenged with regards to retailing and or renting. It’s definitely in the path of growth but not yet safe to invest.

@Jabari Long

Can you explain some of the challenges going on with Fitzgerald? I see a lot of great comps in neighboring Bagley. I plan to turn my houses into rentals. I visited the area a few times and I did not see any immediate cause for alarm (e.g. drug/gang activity). The block that I am buying on has other investors currently rehabbing houses as well. Which neighborhoods would you currently recommend?

Originally posted by @Ashley Correa :

Hello Everyone,

I am planning to invest in Detroit, I am currently from denver where the population keeps increasing and the prices dont drop from the 100k mark. I want to invest in the fitzgerald area as i have found some great properties in that area that can be rehabbed and rented out. 

What would you guys recommend? 

I would buy in Bagley over Fitzgerald any day of the week 

Originally posted by @Ashley Correa :

Hello Everyone,

I am planning to invest in Detroit, I am currently from denver where the population keeps increasing and the prices dont drop from the 100k mark. I want to invest in the fitzgerald area as i have found some great properties in that area that can be rehabbed and rented out. 

What would you guys recommend? 

 Fascinating. You'll invest 1,270 miles and two time zones away in the declining city of Detroit at high risk and ignore the growing, safe city of Phoenix which is 864 miles away in the same time zone and is the fastest appreciating city in the country.

Do tell me please, what is your reasoning. I'm most interested in knowing, I assure you.

Originally posted by @David Barrett :

@Mike M. Detroit is definitely not declining. I know. I live in the area.

 Good. Thank you for the clarification, Glad to see that things are improving.

Originally posted by @Marisa R. :
Originally posted by @Ashley Correa:

Hello Everyone,

I am planning to invest in Detroit, I am currently from denver where the population keeps increasing and the prices dont drop from the 100k mark. I want to invest in the fitzgerald area as i have found some great properties in that area that can be rehabbed and rented out. 

What would you guys recommend? 

I would buy in Bagley over Fitzgerald any day of the week 

 You are very Brave investors.

****************************************

DETROIT, MI — Detroit has been ranked as the worst real estate market in the nation in a new WalletHub study.

With home values rising by an average of more than $16,000 in the first quarter of 2018 but affordability dropping as mortgage rates get higher, the personal-finance website WalletHub released its report on 2018's Best Real-Estate Markets.

To determine the most attractive real-estate markets in the U.S., WalletHub compared 300 cities across 22 key metrics. The data set ranges from median home-price appreciation to home sales turnover rate to job growth.

Sponsored Ad By Banner Health How To Manage Your Family's Health Checklist Keeping track of your family's health can be more manageable than you think.

Detroit ranked 300th overall and 63rd among large cities. Here's a look at how the city fared:

Health of Detroit's Real-Estate Market (1=Best; 150=Avg.):

  • 270th – % of Homes with Negative Equity
  • 161st – Job Growth Rate
  • 93rd – Foreclosure Rate
  • 288th – Number of Unsold Homes Owned by Banks (REOs)
  • 300th – Population Growth Rate

@David Barrett

I agree. From what I saw in my last visit, things appear to be on an upward momentum. I read an article about the new Ford Campus coming to the old train station and bringing thousands of new jobs to the area. Corktown has some nice new condos and lots of construction is going on in the area as well. What will truly revitalize downtown is the addition of some big box stores like a Target for downtown and midtown residents. It makes no sense for residents in Detroit proper to have to drive all the way to the suburbs for basic amenities. The condos around Whole Foods are quite nice as well. Certain areas look reasonably populated and I saw plenty of people walking around in the evenings. I was there during the gentrification and revitalization process in downtown Brooklyn and no one would have believed that downtown Brooklyn (a former haven for drug addicts) would ever turn around either. Brownstones in Red Hook, Bedstuy and Fort Greene (the former locations of very run down project buildings) are all now unaffordable to the average Joe. 

Originally posted by @Mike M. :
Originally posted by @Marisa R.:
Originally posted by @Ashley Correa:

Hello Everyone,

I am planning to invest in Detroit, I am currently from denver where the population keeps increasing and the prices dont drop from the 100k mark. I want to invest in the fitzgerald area as i have found some great properties in that area that can be rehabbed and rented out. 

What would you guys recommend? 

I would buy in Bagley over Fitzgerald any day of the week 

 You are very Brave investors.

****************************************

DETROIT, MI — Detroit has been ranked as the worst real estate market in the nation in a new WalletHub study.

With home values rising by an average of more than $16,000 in the first quarter of 2018 but affordability dropping as mortgage rates get higher, the personal-finance website WalletHub released its report on 2018's Best Real-Estate Markets.

To determine the most attractive real-estate markets in the U.S., WalletHub compared 300 cities across 22 key metrics. The data set ranges from median home-price appreciation to home sales turnover rate to job growth.

Sponsored Ad By Banner Health How To Manage Your Family's Health Checklist Keeping track of your family's health can be more manageable than you think.

Detroit ranked 300th overall and 63rd among large cities. Here's a look at how the city fared:

Health of Detroit's Real-Estate Market (1=Best; 150=Avg.):

  • 270th – % of Homes with Negative Equity
  • 161st – Job Growth Rate
  • 93rd – Foreclosure Rate
  • 288th – Number of Unsold Homes Owned by Banks (REOs)
  • 300th – Population Growth Rate

 Bring it on.....;)

I am a gluton for punishment

Seriously though.....investor success will come down to boots on the ground, understanding product, what and where to buy and of course property management will make or break it

A good reliable contractor will certainly help

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