Hello,
I plan on investing in Detroit some time in the near future. Personally, I think this will be one of the biggest investments in real estate once Detroit figures everything out. I am looking for advise from others on where the best zip codes are in the city, where should I invest, etc.. Any advise from investors in/around Detroit would be great...
I'm not actively investing in the city of Detroit so I won't pretend to be an expert in that market on a block-by-block basis which is what's necessary. There are several challenges to becoming expert in the Detroit market.
One, the city is very large. In terms of area, Detroit is larger than San Francisco, Boston and Manhattan combined. Imagine trying to be an expert regarding real estate values in all three cities simultaneously.
Two, many areas are in transition, some upward but most downward. Detroit's population dropped from 870K to 711K from 2000 to 2010. The majority of that was in the second half of last decade. There are areas that declined rapidly in just a few years. There are areas right now that are seeing abandonment.
Three, the future is uncertain due to Detroit's financial condition and the presence of an Emergency Manager. Detroit's Mayor Bing has talked about plans to consolidate city services in certain areas resulting in more-favored areas and less-favored areas. The plan was never approved or implemented, which areas are which is obviously a huge political football which, if a similar plan is enacted, will be subject to contentious political fights. However, Mayor Bing has no power under the Emergency Manager. We don't know what the Emergency Manager, Kevyn Orr, will do with regard to this plan or anything else, aside from the fact that the city's creditors and bondholders will be taking a huge haircut. It's rumored that they'll be getting less than 10 cents on the dollar.
Four, which areas would be "best" for you depends on your tolerance for risk, desired return and frankly, how much "crap" you can handle. There are up and coming areas with high demand, low vacancy and momentum, like Midtown, Downtown, Corktown, Woodbridge and others but your return will be very different from that available in stable or semi-stable residential neighborhoods, or in war zones. Most people want to invest in Detroit because they see huge ROI projections from the turnkey folks. Those properties are not in the up and coming areas.
Fifth, your final sentence, "I know it will be a good investments if I get sound info and pick my spots right!" isn't how investors think or talk. There's no guarantee that Detroit's population won't bottom out around 600K and your properties won't be located in soon-to-be-abandoned neighborhoods, trashed, scrapped, gutted and burned. Detroit was a city of 2.0 million and over time 1.3 million left. What's the value of their abandoned real estate, much of which are now dirt lots surrounded by other dirt lots?
Finally, understand I say all this as someone who actually likes/loves much about the city. I'll defend it against ignorant generalizations and trash talking but I'll also call it as I see it. Investing in Detroit is for the advanced investor. Feeling lucky or hopeful isn't enough.
John A. all these naysayers with no skin in the game;-( Now I want to invest there!
If you check out the local REIA www.michiganrealestateinvestors.com
you can ask, a friend of mine, Wendy Patton for some insight into Motor City.
Good Luck Investing, Mike
I know of people who are die hard lovers of Detroit who lived there, but finally waved the white flag and moved because of the crime. One person set up a security camera to monitor his home and, yes, they stole the camera! On the other hand I have never met anyone who says that crime is no problem or exaggerated. The city is led by an emergency financial manager who recently said the finances are worse than he thought. With cuts to police and fire departments the situation can only get worse.
The same can be said of the city of Flint which is a smaller version of Detroit. I belong to REIAs in both areas.
Check out Rosedale Park.
James Ross What do you think about this?
I'm new to investing, but born and raised in Detroit. I moved to Houston last year but my family still resides in the city. As for investing I would say invest in close suburbs of Detroit such as Redford, Dearborn, inkster, Southfield and Oak Park. These areas are a little safer and don't have the same government problems as "Detroit ". Although these areas have crime, they have their own police department which is MUCH better than DPD. Also the prices are very low. Contact me if you have any other questions about Detroit, I know it VERY. Well. Good luck!
I own over 60 homes in the suburbs of Detroit and if you need any help on where I invest and why feel free to give me a call anytime. I get a very good return on my investment and don't have all the pit falls of the city of Detroit.
Jim
Looking to buy two properties in Harper woods.. Does anybody know anything about the areas.?
Years ago, I was having trouble finding deals. I pulled up about eight listings in Harper Woods and went and looked at them. What a (bleep)hole town! I haven't been back since. Check out Eastpointe and Roseville. You can get the same houses for the same prices and NOT be in Wayne County.
John A. Check out this thread from a not so happy investor:
http://www.biggerpockets.com/forums/48/topics/65912-detroit-investors-advice-please
Drop me a line and I'll talk to you about it. Not a bad area.
Jim
I know plenty about harper woods. Give me a call if you'd like to discuss.
Years ago, I was having trouble finding deals. I pulled up about eight listings in Harper Woods and went and looked at them. What a (bleep)hole town! I haven't been back since. Check out Eastpointe and Roseville. You can get the same houses for the same prices and NOT be in Wayne County.
Problem with Eastpointe is dealing with the inspectors.
I'm not actively investing in the city of Detroit so I won't pretend to be an expert in that market on a block-by-block basis which is what's necessary. There are several challenges to becoming expert in the Detroit market.
One, the city is very large. In terms of area, Detroit is larger than San Francisco, Boston and Manhattan combined. Imagine trying to be an expert regarding real estate values in all three cities simultaneously.
Two, many areas are in transition, some upward but most downward. Detroit's population dropped from 870K to 711K from 2000 to 2010. The majority of that was in the second half of last decade. There are areas that declined rapidly in just a few years. There are areas right now that are seeing abandonment.
Three, the future is uncertain due to Detroit's financial condition and the presence of an Emergency Manager. Detroit's Mayor Bing has talked about plans to consolidate city services in certain areas resulting in more-favored areas and less-favored areas. The plan was never approved or implemented, which areas are which is obviously a huge political football which, if a similar plan is enacted, will be subject to contentious political fights. However, Mayor Bing has no power under the Emergency Manager. We don't know what the Emergency Manager, Kevyn Orr, will do with regard to this plan or anything else, aside from the fact that the city's creditors and bondholders will be taking a huge haircut. It's rumored that they'll be getting less than 10 cents on the dollar.
Four, which areas would be "best" for you depends on your tolerance for risk, desired return and frankly, how much "crap" you can handle. There are up and coming areas with high demand, low vacancy and momentum, like Midtown, Downtown, Corktown, Woodbridge and others but your return will be very different from that available in stable or semi-stable residential neighborhoods, or in war zones. Most people want to invest in Detroit because they see huge ROI projections from the turnkey folks. Those properties are not in the up and coming areas.
Fifth, your final sentence, "I know it will be a good investments if I get sound info and pick my spots right!" isn't how investors think or talk. There's no guarantee that Detroit's population won't bottom out around 600K and your properties won't be located in soon-to-be-abandoned neighborhoods, trashed, scrapped, gutted and burned. Detroit was a city of 2.0 million and over time 1.3 million left. What's the value of their abandoned real estate, much of which are now dirt lots surrounded by other dirt lots?
Finally, understand I say all this as someone who actually likes/loves much about the city. I'll defend it against ignorant generalizations and trash talking but I'll also call it as I see it. Investing in Detroit is for the advanced investor. Feeling lucky or hopeful isn't enough.
I'm not actively investing in the city of Detroit so I won't pretend to be an expert in that market on a block-by-block basis which is what's necessary. There are several challenges to becoming expert in the Detroit market.
One, the city is very large. In terms of area, Detroit is larger than San Francisco, Boston and Manhattan combined. Imagine trying to be an expert regarding real estate values in all three cities simultaneously.
Two, many areas are in transition, some upward but most downward. Detroit's population dropped from 870K to 711K from 2000 to 2010. The majority of that was in the second half of last decade. There are areas that declined rapidly in just a few years. There are areas right now that are seeing abandonment.
Three, the future is uncertain due to Detroit's financial condition and the presence of an Emergency Manager. Detroit's Mayor Bing has talked about plans to consolidate city services in certain areas resulting in more-favored areas and less-favored areas. The plan was never approved or implemented, which areas are which is obviously a huge political football which, if a similar plan is enacted, will be subject to contentious political fights. However, Mayor Bing has no power under the Emergency Manager. We don't know what the Emergency Manager, Kevyn Orr, will do with regard to this plan or anything else, aside from the fact that the city's creditors and bondholders will be taking a huge haircut. It's rumored that they'll be getting less than 10 cents on the dollar.
Four, which areas would be "best" for you depends on your tolerance for risk, desired return and frankly, how much "crap" you can handle. There are up and coming areas with high demand, low vacancy and momentum, like Midtown, Downtown, Corktown, Woodbridge and others but your return will be very different from that available in stable or semi-stable residential neighborhoods, or in war zones. Most people want to invest in Detroit because they see huge ROI projections from the turnkey folks. Those properties are not in the up and coming areas.
Fifth, your final sentence, "I know it will be a good investments if I get sound info and pick my spots right!" isn't how investors think or talk. There's no guarantee that Detroit's population won't bottom out around 600K and your properties won't be located in soon-to-be-abandoned neighborhoods, trashed, scrapped, gutted and burned. Detroit was a city of 2.0 million and over time 1.3 million left. What's the value of their abandoned real estate, much of which are now dirt lots surrounded by other dirt lots?
Finally, understand I say all this as someone who actually likes/loves much about the city. I'll defend it against ignorant generalizations and trash talking but I'll also call it as I see it. Investing in Detroit is for the advanced investor. Feeling lucky or hopeful isn't enough.
This post is fantastic and should be read before any out of state people sign a purchase agreement in detroit.
Better yet, where are the bad parts of Detroit, I was looking at Harper Woods, Hamtramck and Dearborn are these areas good or stay away? Homes in these areas are a few thousands dollars. If these areas are bad, where are good areas where I can get homes for cheap?
Harper Woods, Hamtramck, and Dearborn are all suburbs. Which is it? Do you want the city or the suburbs? We've all been telling you to look at the suburbs instead of the city. You said you want the city only, but then you list three suburbs.
From the answers that was posted, I thought those three was in the city. My fault! I still havent visited the city yet so im going off what is being said until I get there. Suburbs it is then, if I can get these homes for cheap and they are not in the city I think it will be a great investment while lowering the risk. Are these good areas?
Telling you what is a "Good" area and a "Bad" area pretty much opens me to litigation. Do some homework with crime rates and demographics and narrow your areas down and I can help you from there. Talking to one of the smart people in this thread that isn't an agent is probably worth while. I'd suggest messaging them for a phone number. If you want to talk more, my number is in my signature.
Steering you to one place or another. We can point you in the right direction like saying check out this data or that data and get back to me, but saying "ABC location is garbage or fantastic" is not a good idea.
I was told in a fair housing class that you can't say anything bad about a particular city. I asked her, "What if I'm at a wedding and someone asks me what I think of XXXXXX city?" And I reply, "That city sucks. I wouldn't invest a dime there." She said that would be breaking a bunch of rules and laws.
I got into an argument with the instructor. Apparantly freedom of speech doesn't apply when you have a real estate license, according to her.
I am an out of state investor and I personally own 71 Investment Properties in Detroit. I have flipped over 181 homes there since 2009. There are areas all over the city with amazing cash flow & flip deals.
Any specific questions I can answer feel free to let me know...
where do you own most of your houses?
Any specific questions I can answer feel free to let me know...
@ Daniel Gura and everyone else: "if you think this sounds too good to be true, it probably is." Check out this link: http://www.complaintsboard.com/profile-974014. Click on comment headline to see original detailed complaint about Sean Whalen and "Prop 23."
Re Detroit: I've lived here 34 years. If you want to be a slumlord, forget it: slumlords and predatory lenders are a big part of the reason the middle class moved out. When they left, the schools got worse and the tax(paying) base evaporated. It's been a downward spiral.
If you want to do a quality rehab to sell, and have a good local team, Detroit is the place. Young techies and social entrepreneurs in Downtown, Corktown, and Midtown are looking to buy as loft rents go up. Buy neighborhoods, not ZIP codes. The best starting-to-get-hot neighborhoods? University District, Green Acres, Rosedale-Grandmont, West (Indian) Village, East English Village, maybe SW Detroit. But you have to be a hands-on investor to make this work. It's a high-risk long-distance play even if you're Chinese or the Blackstone Group.
Detroit has a good emergency manager, a great bankruptcy judge, and an experienced turnaround exec in Mayor Mike Duggan (white guy who won with black write-in vote). We've got maybe seven years to stumble across our Next Big Thing - unfortunately, only about .001% of the population is capable of figuring out what that might be. Of course, it only took one Henry Ford.
My advice? Look inside a 10-mile radius of where you are.