Roseville, MI · Member since 2017 · 27 posts · 16 votes
Hi everyone I would like to start out by saying I am absolutely new to all of this however for the last 6 months I have spent countless hours educating myself towards Investing. I do have some knowledge and great insight on the whole idea however I need some advice from some people who have been exactly where I am today and made it through successfully.
So my question is, is investing in low cost homes in Detroit MI worth it? Be it as a fix and flip, rental or simply just to acquire the land. Many of the homes Ive looked into are solid structures and some currently habitable. So is it
Hey Jackson,
Welcome to BP, you are taking the right steps. The question of "is Detroit worth it" comes up a lot, and my answer is yes. There are a lot of cheap, safe, and high return houses in the Metro Detroit area. When you get in the city, you just have to be very careful as you move block to block, but returns can be found there too.
I personally invest in Metro Detroit. Detroit has big plans to grow the city tech center and bring all sports team downtown, meaning the whole Metro area will feel the growth. If I were you, just start by picking a specific area, driving around, and getting a feel for home and rent prices. That way you will know a good deal when you see one. Make sure you have a team in place (realtor, lender, lawyer, etc) to pull the trigger on a property quickly.
Let me know if you have any questions, I'm happy to help. Good luck!
Hey Jackson,
Welcome to BP, you are taking the right steps. The question of "is Detroit worth it" comes up a lot, and my answer is yes. There are a lot of cheap, safe, and high return houses in the Metro Detroit area. When you get in the city, you just have to be very careful as you move block to block, but returns can be found there too.
I personally invest in Metro Detroit. Detroit has big plans to grow the city tech center and bring all sports team downtown, meaning the whole Metro area will feel the growth. If I were you, just start by picking a specific area, driving around, and getting a feel for home and rent prices. That way you will know a good deal when you see one. Make sure you have a team in place (realtor, lender, lawyer, etc) to pull the trigger on a property quickly.
Let me know if you have any questions, I'm happy to help. Good luck!
Because of what Detroit has been through, I see why this question comes up often. I think it will come down to making a personal black or white choice to invest there. I am very much considering investing there personally as I see positive growth and change for Detroit in the future. As it has been stated, tread carefully because you are newer to investing. Build a trustworthy team. Partner with the right people. Stay focused if things crop up unexpectedly, and above all, have fun in your ventures!
As @Dallas Trufyn & @Matt Souza mentioned, it all depends. It could turn into a nightmare or a gold mine. I had modest success but I am now looking into bigger deals to offset cashflow. I however will recommend to focus on cash flow rather than speculation on appreciation. That will make you win in the long turn. With low cost housing, there are many over head costs that are very hard to predict. That include non-payment, eviction etc
Hello Jackson, There has been much written about Detroit and the collapsed industries there and elsewhere in the country . This means that there is a glut of properties being sold by people leaving the area for other areas. Fortunes have been made in real estate by gamblers and risk takers. If you feel that industry will return to the region some day and you are young enough to see it happen in your life time and you are a risk taker then this would be an excellent way of obtaining inventory at a bargain prices. Remember this would be like purchasing stock many years early and sitting on your money while it may appreciate or perhaps not. I am not much of a risk taker in manufacturing as I have seen manufacturing go off shore for years. The EPA, OSHA and Unions killed manufacturing in the US. The area may go under redevelopment in another arena at some time in the future. At this time you would have to be a visionary to see through the dark cloud looming in this area. Will it ever be a vacation spot? Will they build a major airport? Will it become a hub of trucking and transportation. What will draw people to the area in the future? What is the forecast from the government on the long term of the area? You have to be a visionary and think of ROI.
Cash flow should be your only consideration. Investing money to upgrade is not where the money is. You do not want to own the nicest home on the street in a depressed area. Let others take that risk. Management is always more intensive but that is where the returns come from.
If you decide to invest purchase habitable or nearly habitable and rake off the profits from cash flow.
If the district turns around, which is unlikely, you then profit again by either selling at higher returns to investors or reno and flip yourself at that point in time.
Thank you everyone for the feed back its very reassuring to see people respond with the same views i have on this topic. I am in the process of building a team, as of right now i have a very loyal agent Ive known since grade school she is licensed and the one sharing the properties with me also her charge is free which is even better. I have a well respected realty lawyer on call as well. My credit is bad so i am going at this with my own cash, I know many people would say that's a terrible idea however being new I feel it would be hard or very costly to get a lender on my side, so im going at this head on! The list my agent sent me had roughly 25 properties all priced under 8k I haven't physically viewed them but pulled up pictures off of Zillow to at least get an idea of what I'm looking at. I know I have a lot of work to do before I purchase but first I need to accumulate as much information as possible thank you for the help everyone!!
Be prepared, assuming they are habitable, they will be discussing by most peoples standards. Keep in mind you will not be living there and the type of tenants you get will not be able to do any better.
It will be a very steep learning curve for a new investor.
If your agent is not well versed in income investment property, particularly in this type of area, you will be required to train her to your needs. Agents without experience in this area of expertise must be lead.
Lots of activity on this thread already, that lets you know that Detroit is BACK!! I love it because the market does so well. We have times where we scramble for inventory for about a week or so but, when it hits WE are the only ones with it or those we send the lists out to. Answer from me as an investor and one who brokers for oversea investors, YES its is worth it. And as @Haseeb Awanstated it all depends. What's your exit strategy when you invest? PM me, lets work!
Todd Douglas assuming all goes well and my overall cost to obtain the property and have it on the market as a rental is as low as i expect i wouldn't plan for an exit strategy, if the property is doing well in generating some income I would continue on in that direction. From what Ive seen personally and read about downtown, I anticipate Detroit to come back in a big way over the next decade. For all we know that land underneath those disgusting homes could eventually be a goldmine...
There are pockets in the city where home values are low and rents are high, like the northwest corner for example. you really have to know the city in and out, i would think, to invest successfully there. if you grew up in metro detroit, I would invest there first all day long. Detroit is huge. roseville, eastpointe, those are small cities where you can learn demographics for the whole place easily if you dont already know them. Seems like a safer bet to me.
You live in the area, so you may want to ask about good neighborhoods, drive them, and check adjacent areas too. Then go to info infousa to see how many new residents are in that area. Look at school building ratings and parks . Finally, check with the city police on crime in that area. I don't know about regulations, but check that too. Detroit is a roll of the dice in the city itself, so dont build your whole portfolio there. Good luck!
Jackson Barr
There's some great insight in the thread about investing in the D. Haseeb Awan is spot on.
Feel free to drop me a line anytime, I'm happy to answer any questions I can.
Does anybody have the name and number of a solid realtor in Detroit who is able to recommend suitable houses for fix and flip in good areas of the city.