Detroit - How Bad is it Really??

Question

Hello team!

We all hear the jokes on the Podcasts, but I've heard some "interesting" things about the market in Michigan, Detroit specifically. Anyone with boots on the ground and 1st hand knowledge? Can you confirm or deny??

Rob K. · Answer

My friend used to do junk removal and would sometimes get calls from out of state people who had purchased vacant lots on Ebay for a few hundred dollars. They would have to pay much more than that to have garbage removed from the property to avoid huge fines from the city. Illegal dumping is a huge problem in Detroit.

I wouldn't take a vacant lot for free.

Account Closed · Answer

@Peter Grosso What neighborhoods are your properties in? I'm just curious because I'm trying to get a pulse on where a reasonable market is located. I'm interested in the Boston-Edison district but I'm interested to hear about your overall experience. How much does that insurance set you back? I imagine it's not cheap!

@Joe Gore Unions didn't bring down the Detroit economy and city. It was a combination of outsourcing/moving plants outside the city, raised competition from import vehicles, decades of poor political decisions, and racial tensions that saw a majority of the affluent (white and black alike) population leave the city...leaving a soon to be majority unemployed and impoverished population.

Alvin Neal · Answer

I guess it all depends on what area of the city you are referring to. Midtown Detroit is waiting list only and the downtown prices are increasing and pushing out the middle class. Other areas on the rebound are Boston-Edison District, Corktown, Woodbridge, Indian village, East English Village, The New Center, University District and a few other neighborhoods. Almost 40 square miles of the city is vacant. There are warzones and thats from east, west, northeast, southeast, northwest and southwest.

Account Closed · Answer

The reason Detroit went down hill is the unions rob everyone from the milkman to the shoe shine boy on the corner.

Joe Gore

Peter Grosso · Answer

I own several properties in Detroit.  It is a tough market but if you produce a good product you can make good money.   Our toughest problems have been finding an insurance company that insures vacant properties (we found one), keeping them safe until they are rented, and dealing with section 8 inspectors (they are run by competing management companies).

Jerry Brown · Answer

@Alvin Neal Thanks everyone for your feedback.

It sounds like there's a lot of similarities to the South Side of Chicago, which I work in now.  I'm certainly intrigued...

Will F. · Answer

Sounds like the type of place I"d like to buy for super cheap now and hold for many years. I guess it could also just become so blighted that the city never returns, but I think that if the US market returns as a whole it might appreciate either way.  The Chinese are buying up Detroit like they're kids in a candy store.  Ironic thing is that the Chinese are part of the reason Detroit and US Factories went down in general. Now they're returning with their Chinese Yen and buying up our properties. I read an article saying that their are parts of Detroit that are like mainland China now.

Jason Farmer · Answer

@Jerry Brown

Everyones right about Detroit, but there still some decent areas. If you a local you can clean up renting to section 8 tenants. Detroit is tricky but i posted a few days ago about Detroit, i have a buddy that started with 10 rentals he bought for 2k a piece. Him and his wife rehabbed them. After about a year he was able to get section 8 renters, and every property was rented for $650, and that was almost 10 years ago..And to this day he still has those properties plus somewhere around 10-15 more...HE dosent use porperty managemnt he does it himself...You do the math...i can tell you one thing, he hasnt worked a regular job in years, him and his wife, travel, he gets upnd enjoys life to the fullest, stress free, financially free and he dosent have some unexperienced 25 year old boss telling him what to do.

But the key to his operation, is, Detriots his home town, he knows it like the back of his hand, he lives there. So he knows exactly where to buy. Hes a hometown dude everyone respects. So it work for him...I would personally say, stay away from Detroit if your dont understand how that market works. But if you serious hope on a plane and spend a week there drive around, talk to people who lve there, learn the city. I live in CA i wanted to invest in Northern In. So i got on a flight and went to work. And now I know that area like on know Los Angeles. Gary In is similar to Detriot. its not s broekn down but i get good rents, very good...

I know alot of people here will not like it but i always say follow your heart and your dreams. Not all of us have big money to start buying in beatiful cities.  The key is just to learn the areas Thats all nothing more nothing less.

Peter Grosso · Answer

@cyle Lublin, I own all or have owned 28 properties all over Detroit.  Boston-Edison is a great area.  Although Boston-Edison requires more capital it is a great area.  I pay about $65 a month for Per-50K worth of coverage, however I just met someone who gets a better deal then I do.  Ill let you know if and when I do better.   What are you planning on doing with the property?

Peter Grosso · Answer

it is actually a lot of Chinese who live in Canada.  My Property Manager and I were interviewed for a Chinese TV station in Canada.

Detroit - How Bad is it Really??

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