Updated almost 11 years ago on . Most recent reply
Bailouts For Major A City, Yay or Nay?
This morning I read an article posted on MSN.com regarding whether or not Detroit will receive a government bailout to help improve the diminished economy of the Motor City. To see the article click here.
Fallen markets, especially in real-estate, prove to be advantageous for investors such as ourselves. We have purchased over 500 houses in the Detroit market at an unbelievably low price. We are able to rehab these properties and quickly rent them out at an average cap rate of 9%.
However, the numbers aren't the only reason why we and other investors choose to invest in these areas. These areas are chosen for their potential. With or without a bailout, rehabbing over 500 homes, in any area will help boost morale and even the economy. Now, don't get me wrong, we are not thinking our investments will single-handily turn the whole city around but it will provide a boost in the real estate and rental market.
For investors, a bailout is a great thing. Detroit already has plans and projects in place thanks to private investors. Updating their railway system, the new home of the Red Wings, and plans for new shopping centers have been in the works for quite some time. Relief from the government will open the door to numerous opportunities and investors hoping to pump life back into a once booming city.
We see this as a great opportunity for us and our investors.