OH NO! NOT DETROIT!

OH NO! NOT DETROIT!

Real Estate Broker · Troy, MI · Member since 2012 · 42 posts · 12 votes

Hello BiggerPockets community! I'd like to take a moment to thank everyone in advance for all the care and considerable knowledge that's been put into this site. It's an incredibly powerful resource that I've lurked for quite awhile. I've loved so much of the content and conversation I've read here.


After a recent road trip (white water rafting in West Virginia), during which I had a BP podcast marathon, I decided that when I got home, I would engage with the community more. It's my first time really taking part in a community. I've read forums of all types for decades, but I've never really got involved with one before.

My name is Tommy Desmond, I'm a real estate investor and agent in southeast Michigan (THE DREADED DETROIT!). Actually not Detroit proper though, my primary areas of activity are in south Oakland county (immediately north of Detroit) and west Macomb County. I'm an agent at the Keller Williams in downtown Royal Oak, where I serve on the Agent Leadership Council (ALC) and as the chairman of the Technology Committee. I work mainly in Royal Oak, Birmingham, Bloomfield Hills, Troy, Rochester Hills, as well as Ferndale, Berkley, Clawson, Madison Heights, Sterling Heights, Pleasant Ridge, Huntington Woods, Shelby, Utica, and Warren. I've been with KW since 2009.

In my capacity as an agent, I'm more of a listing agent than a buyers agent. As an investor, I'm already a rehabber and I plan to buy and hold multi-family in the (near) future (haven't found the right deal yet).

I'm active with a few local REIAs, and I attend sheriff sales (Oakland county's) on a fairly consistent basis.

I'm married to the love my life, Katie, I have three great kids, and a boxer named Charlie.

My wife is an active part of my real estate investments. She's great at construction and design, and as of Oct 21st of this year, we're both getting our Michigan builder's licenses.

I've owned quite a few businesses over the past couple decades. Over the years, I also owned a print shop, a screen print shop, several e-commerce sites, and a video production company. I've got a solid web development background, writing PHP since its inception. I was one of the developers for early database-driven iterations of the MLS in our area, back when they were still faxing new listings to each brokerage for daily inclusion into stacks of 3-ring binders (though I doubt any of that code is still powering our MLS today).

I came to real estate thinking that it would be a lifetime business. My previous companies, never really seemed like permanent business models for me. They felt more like companies I was cutting my teeth on, and learning the basics of building and running a company, managing people and processes. Some of my early businesses had pretty decent success, others I smashed into the ground. Sometimes I lived with a hefty bank account, and other times I was counting the change rattling around in my cup holders to buy lunch.

Through it all, I've always been persistent, and I've never lost the belief that entrepreneurship is the only way to live my life with passion and the potential for freedom for my family… a philosophy I've seen over and over again here at BP, which I think is great.

I'm looking to network with other investors for idea, network, and resource sharing. Rehab wise, I'm buying around the $50-100k mark, with the goal ARV of between $135-200k respectively. Buy and Hold wise, I'm still looking and learning, and building my leverage to acquire my first multi-family. My current 5-year goal (for Holds) is to add 20 units/properties to my portfolio that cash-flow at around $500/month each. I'd love to find some mentorship relative to that. I'm also interested in meeting international investors who are interested in the Detroit area.

I'm pretty good with HUD deals, and have gotten quite a few good deals there, so if you have any questions about them, that's an area I might be able to provide some value.

I look forward to meeting many of you, and hopefully working with a few of you.
More than anything I wish everyone the good fortunes they seek.

… But for the record, no, I can't help you get a $400 house in Detroit.

Onward!

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Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
13y

I really don't think the Detroit area is much different than any of the major metros in Ohio (Cin, Col, Cle, Day), or Indianapolis or Kansas City. The $25-40k house (all-in) that rents for $750-900 is attainable in all these metros. It's essentially impossible to get bank financing on these properties, so it's strictly cash purchases or private money financing. This absence of institutional financing has kept prices depressed, so a mixed blessing for investors. It's always a challenge to get quality property management for these inexpensive houses. All the PM's prefer nicer areas with larger fees and less tenant issues. Owners need to stay on top of things carefully, and they require active management. Be cautious and very prepared before purchasing homes like these from out of the area.

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  • Flip and Buy/Hold Investor · Rochester Hills, MI · Member since 2013 · 245 posts · 105 votes
    13y

    Hello Tommy. It is always nice to see more Michigan investors hanging around BP. Good luck finding that first rental. How many rehabs have you done?

  • Springfield, OH · Member since 2012 · 155 posts · 50 votes
    13y

    Hello, Tommy.

    Pleasure to meet you.

    I, too, have come into real estate knowing in my heart it's a lifetime business. I always tell my husband, for better or worse, it's a "burn my ships" kind of endeavor!

    Hope to hear more from you.

    Jessica

  • Specialist · Grand Rapids and Kalamazoo, MI · Member since 2013 · 391 posts · 116 votes
    13y

    Welcome @Tommy Desmond ... it's pretty clear that you have the skill and determination to be wonderfully successful. It will be great to have your input here!

  • Investor · Macomb, MI · Member since 2013 · 654 posts · 115 votes
    13y
    My current 5-year goal (for Holds) is to add 20 units/properties to my portfolio that cash-flow at around $500/month each. I'd love to find some mentorship relative to that. I'm also interested in meeting international investors who are interested in the Detroit area.

    @Tommy Desmond , Welcome to BP. This is EXACTLY my goal and what I am currently doing. I have 3 years left to acquire 15 more properties.

    My only hold back is capital. I am limited to my own capital. I have spoken with now around 20 lender's trying to find Investment capital. Basically every time I think I find the treasure, it ends up being a falacy. So when I'm not on a big project at work it takes me 4 to 5 months to save up and purchase, rehab and rent one property.

  • Real Estate Broker · Troy, MI · Member since 2012 · 42 posts · 12 votes
    13y

    @Jon I've found and helped coordinate over a dozen flips for clients, and I've just recently sold my first 100% independent rehab last month (Aug 2013). I'm no where near as experienced as some of the people on here, but I've got a handful under my belt.

    I've written a blog post about my first independent flip, over here (it's on BP).

  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    13y

    Hey @Tommy Desmond Thanks for jumping in, and for hanging out with @Joshua D. and I on your road trip! :)

  • Investor · West Bloomfield, MI · Member since 2009 · 358 posts · 306 votes
    13y

    Welcome @Tommy Desmond !! As you can tell, this is a great site for investors. There's a number of us in SE MI doing a variety of flavors of investing in various areas. I hope to see you around at one of the local REIAs. I usually go to the ones in Troy and Berkley.

  • Investor · Atlanta, GA · Member since 2013 · 646 posts · 392 votes
    13y

    Welcome to BP @Tommy Desmond you have come to the right place. It was great reading your introduction.

    Like you I too believe about real estate being a lifetime business. I wish you the very best and success in years to come. Hopefully, we can read some of your success stories here on BP.

  • Involved In Real Estate · Rochester Hills, MI · Member since 2010 · 812 posts · 178 votes
    13y

    Welcome Tommy. One of the best intro posts I've seen.

  • Homeowner · Frisco, TX · Member since 2013 · 22 posts · 4 votes
    13y
    Wow, impressive background. I'm new to BP as well ... I feel so inadequate in comparison. LOL Looking forward to hearing more and how things pan out for you.
  • Las Vegas, NV · Member since 2012 · 251 posts · 9 votes
    13y

    How is Detroit real estate market? Is that save to buy rentals or do flips? Is the market picking up?

  • Jerry W.Pro Member
    Moderator
    Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
    13y

    @Tommy Desmond , Welcome to BP bud. With your background, experience, and current job you already have a great edge. Even with that knowledge look in the learn section. it has an amazing amount of material, even for pros. Best of luck.

  • Berkley, MI · Member since 2013 · 27 posts · 0 votes
    13y
    Hello Mr.Desmond, I grew up in Royal Oak and now living in Berkley for the last two years with my wife and daughter. We've been working with our realtor for the past few months to look at what options we might have for buying an investment property. Needless to say, no luck so far. It would be wonderful to work with somebody who understands and could guide us in making the right choice for today's market. Thank you for your time again.
  • Real Estate Broker · Troy, MI · Member since 2012 · 42 posts · 12 votes
    13y

    @Rob Yeichner No need to feel like that, compared to the seasoned pros on here and at my REIA, I'm 1000% green with a ton to learn. That's fine by me, I love learning new things, and I really love learning new PROFITABLE things ;)

    @Patricia Franciulli Things are definitely picking up in many areas of the metro-Detroit market. In my primary area, Oakland County, prices are up 28% year-over-year. Even in the city there's a lot of activity brewing. The inner city neighborhoods like Corktown and Midtown are booming, but the outer ring city areas are still very very rough (There's your mythical $500 houses). In the areas I work, there are some great deals, though it is a seller's market with very low inventories. In general, there's a feeling of progress most everywhere.

  • Real Estate Broker · Troy, MI · Member since 2012 · 42 posts · 12 votes
    13y

    @Jerry W. I hear you about the Learn section. It's pretty mindblowing the amount of information they've got there. I got the Flip and Estimating Repairs book that I'm going through now. I also read the Beginner's Guide to REI. I've got a ton of other non-BP stuff I've read or audiobooked as well. I feel like I've only touched the tip of the iceberg. There's so much to know. I'm going to have to just focus on one chunk and get good at it, because there's no way to know it all.

  • Las Vegas, NV · Member since 2012 · 251 posts · 9 votes
    13y

    @Tommy How long does it take to sell a home there? average?

    How about the flip how long the repair takes?

  • Investor · Macomb, MI · Member since 2013 · 654 posts · 115 votes
    13y

    @Eric Reichelt , waiting on a Realtor to find an Investment property will most likely take you a long time to get that first property. I know this first hand and when I started looking there were more properties to choose from.

    You have to be fast. Learn to find them yourself. Find an agent who is willing to get right on it. Be ready with a blank check copy to use for your EMD. Have a purchase agreement handy at all times unless the seller requires use of theirs. Have proof of funds ready.

    MLS is harder but you can still get deals. In fact right now there are some great prices again in the market I buy in for rentals. Timing and readiness means everything when buying from the MLS.

    Be ready to calculate your repair costs fast so you can have an offer ready the same day or no later than the next morning bright and early.

    Nothing against any agents on BP but I am on my 7th. He is doing exactly what I do so we have hit it off very well. To this day, I have NEVER waited on an agent to find me a property. I use them for paperwork and that's it. This includes when I'm buying for a personal residence.

    There are lots of ways to do the property research yourself so you don't go in blind. Selling agents WILL leave details out whether intentional or not. I surprise agents from time to time with the information I find and bring up with questions at closing. I've told agents things about their clients property that they don't even know and sometimes even why I think they are selling.

    I need to know everything I can before I buy a house. You need to be armed BEFORE you see the property. Research the market area, property history, taxes and so forth. Armed with this information you will be ahead of the game and get the deal instead of the guy standing at the door with your agent only to find out the house has actually been sold already because the agent was too slow to the party or never actually checked on the property status.

    I know this from experience, hence why I am on agent number 7. I am probably one of the easiest clients an agent can have. I do my own comps, property finding and researching, tax search, owner search, sales history, market analysis. All things Agents use to do back in the day but now that everything is electronic with the internet, many agents just post on the MLS and sit back and wait.

    Sorry to any of you agents here who actually do your job. I'm not saying ALL agents do this. But many I have dealt with do. In fact, 1 out of 7 in my experience... actually do their job.

    That's a blog topic right there. But maybe I won't touch that one. Could offend quite a few people here on BP and I wouldn't want to do that...

    would I ???? ;-)

    @Tommy Desmond , wasn't sure if you said mythical in the sense that $500 houses really don't exist or in Detroit it's actually not a myth?! Since I was a little confused I wanted to clear it up and let @Patricia Franciulli that there was a time that $500 would buy you a house in Detroit ( last year in fact ). Now a days a cheap house seems to be in the market of $2K in less than desired areas unless you get the deal right from the home-owner and not a wholesaler or MLS posting.

  • Las Vegas, NV · Member since 2012 · 251 posts · 9 votes
    13y

    @Aron How is the rental market for those homes? Are they in bad neighborhood? How much they rent for?

  • Las Vegas, NV · Member since 2012 · 251 posts · 9 votes
    13y

    Which areas in detroit you guys like to buy for flip or rental? Is there any trustee sale? Where do you guys find those homes?

  • Farmington Hills, MI · Member since 2013 · 32 posts · 0 votes
    13y

    @Patricia Franciulli

    Investing in the actual city of Detroit can be very tricky. You really have to know the area well. If you aren't familiar with the area and you buy a house in a war zone I would say best of luck. You will have problems in Detroit from stripping copper piping, ripping out a/c units, stealing siding and so on. I've heard and seen it all. Personally I think it's not worth it to invest in Detroit.

    Now that being said a lot of the suburbs around Detroit are great areas to invest. There is a very strong rental market and still plenty of opportunity out there.

    Don't get me wrong there are people making lots of money in Detroit but they really know what they're doing and they know the best areas to invest in.

    I would focus more on the metro Detroit suburb areas if I were you. Save the headache that could come with Detroit.

  • Southfield, MI · Member since 2013 · 4 posts · 0 votes
    13y

    I ca totally agree about Detroit, but I have found the surrounding suburbs prime area, I really need some buyers in my pipeline. I have very good prospects

  • Real Estate Broker · Troy, MI · Member since 2012 · 42 posts · 12 votes
    13y

    @Patricia Franciulli In the suburban areas I deal with, my average DOM is from 15-30 days right now. We're at a relatively low inventory point, but it's starting to build up a little.

    @Aaron Yates Those $500 houses definitely do exist in the city, just probably not in places you want to get stuck dealing with. I get calls weekly from hotshot "investors" in NY and CA that think they're the first person to discover the $500 house in Detroit, and that I should be honored to drive over to the 200 properties on their lists and give them detailed reports about the properties. I don't do that.

    Honestly, I would be very wary of using agents to find investment properties in the first place. I'll be the first to tell you that 90% of the training agents get is incentivized towards retail buyers and sellers. The truth is, most of them don't really learn the specialty skills that go along with investment properties. $5k under asking is a deal to many of them.

    I mentioned the other day in my office that I was thinking of wholesaling one of the properties I picked up, and not a single person in the office had heard of it, including a broker. It's just not their business.

    From their perspective, and perhaps rightfully, why would they do the extra leg work when it just results in a lower commission for them? Investors don't sign exclusive agreements with agents, where retail buyers and sellers do. There is more than enough business in the retail market that most agents stay there, and the ones that don't, pick up the deals themselves. I personally still have a thriving retail listing business that exists symbiotically with and parallel to my investment business. Investors I do work with have a track record, so their quantity of business makes the added effort worth it.

    Agents also have reputations to maintain amongst each other in the retail circuit. If they get pegged as an agent who lowballs offers all the time, other agents will just stop responding to their offers. Lowballing an offer on property that has no distressing, nor a very motivated seller, is a waste of everyone's time. Most agents won't want to damage their reputations in the hopes one of their investors will pick up a bargain.

    As far as Detroit proper goes, I totally agree with @Account Closed , the city is cleaning up somewhat, but that's not CLEANED up. So many of Detroit's moving parts are so defunct and inoperable that things you'd think are simple to accomplish aren't. Even easy things like pulling information from the public record... in Oakland or Macomb county, it's not a problem, in Detroit, there's so much missing or incorrect information, it's almost pointless to waste your time looking it up.

    There are definitely people making money in Detroit, without a doubt, but these are seasoned people, who typically have connections and money behind them. Don't expect to show up to the party with $10k and own a shiny new subdivision, because that's not what's happening here.

  • Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    13y

    I saw on television this morning that the mafia unions trying stop Detroit from filing bankruptcy. I think Detroit should file and start all over fresh without the overhead and the unions, and the city of Detroit would be a good place to raise a family. My 2 cents,


    Joe Gore
  • Real Estate Broker · Troy, MI · Member since 2012 · 42 posts · 12 votes
    13y

    The unfortunate end result of Detroit's restructuring is that the working stiff and the retiree will probably take the brunt of it. It's brutal and unfortunate, but all the criminals who caused the problem don't have any paper trails to reclaim any assets. It's been a feeding frenzy for nepotism and shady dealers for so long, all the capital that went into them is just a ghost now. There's only one place the city has legitimate money, and that's in its law abiding working class. It's a sad story, but it has to end so a new chapter can start.

    With the emergency management, the unions can stamp around all they want, the well has run dry, and yelling at it won't make it wet again.

  • Las Vegas, NV · Member since 2012 · 251 posts · 9 votes
    13y

    For sure I would love to find some cheap homes to my rental inventory. I do not like the war zones and I would not mind to take a look at some cheap homes that makes sense to buy and rent to section 8 around that area. How is the eviction there? hard to evict tenants?

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