All Forum Posts by: Patricia N.

Ive dealt with the lead inspection/remediation of about 10 houses in Detroit so far. I pay $495 for the initial inspection/clearance but this is because I have a bulk agreement with someone. The majority of houses in Detroit will need some sort of remediation. I have seen quotes from 800-5k for the work required for lead alone. Only the minority of houses pass on the initial lead inspection, which means that most houses will have this as a yearly expense. Be realistic and anticipate that there is a large risk this will be a yearly expense. Additionally! The lead inspector we used let us know the state lowered the requirements for how much is permitted in the home - meaning this is going to get more expensive and the requirements from the city could very well change. 

 Jays estimates for compliance are fairly on point, sometimes it can go higher if a new roof or cement work is needed. 

Im happy to see this thread on here. I think its really disingenuous for people on BP to sell investing in Detroit real estate without discussing this. 

https://www.waynecountylandrecords.com/recorder/web/

Seriously if I could reach through the computer and shake your hand for this thread I would. As a newer poster to BP (but someone who is VERY active in Detroit) I am actually really astonished at how many people are peddling this nonsense. I think a lot of people who are taking this approach have a fundamentally flawed view of risk and variance - or simply don't consider it all. Firstly, few people realize that by nature very few people are on here posting that they made huge financial miscalculations, lost tons of money and abandoned their idea of getting supplemental income with rentals. Very few people have the honesty to write a post entitled "I took out crappy loans, regret what I did, and am now broker than I was before". Risk and variance are real things - even more so if you are investing with no to little money. For every success story there are probably 15 failures - in Detroit anyway. 

Additionally, a lot of the verbiage worries me. You cant replace a tenants furnace in the middle of winter with "positivity". "Lots of time spent on BP" wont mean anything when your tenant's basement is backing up with sewage regularly and you cant afford a dig up. Your tenant escrows their rent because their roof is caving in but you need their rent to pay for it?  The judge at the 36th District Court in Detroit will laugh in your face.

PS shout out to everyone on BP who is encouraging people with no liquidity to invest in Detroit real estate but isnt mentioning their new city certification program, that they are requiring lead certification, and that the majority of the houses in Detroit will need lead abatement ($$). When those people exit the market in a hurry there's a bunch of us out here waiting to pick up the better houses ;) 

Anyways! Sorry for the rant and thanks for posting this! 

$150 for the initial inspection. $400 (ish) for intial lead inspection that includes clearance depending on who you deal with. Additionally I would assume (from the information provided) you might have to do some remediation. Depending on what they find with the lead it could be a yearly expense. 

Let me be clear. To put it mildly, I think the Morris Invest people are intensely unethical, willfully deceiving people, peddling products that don't exist, and are just fundamentally bad business people. **Ive put I think denoting this is my own personal opinion if anyone tries to flag this.

That being said I have no sympathy for anyone who does business with them going forward. If you are going to hand over 50k (or more!!!) of your hard earned money you should do your due diligence, and the news has spread far enough where anyone who spends ten minutes will be informed. If you dont care about your money enough to click on the second page of Google that is your own problem. At this point, they have been pretty thoroughly exposed. Even if someone searching them just scanned their own statements on their website there are giant red flags. I mean they closed a public statement about the most egregious ethical and legal issues they've ever faced with a nonsense quote from Game of Thrones. All allegations of fraud and ponzi schemes aside, is that the behavior of anyone you want anywhere near your money? "Sorry your upset but here's a pseudo-inspirational quote from an HBO show"! Some really heavy mental lifting going on there. 

Additionally, Google algorithms are highly sensitive so always keep in mind what shows on your computer will be different than others and their algorithm changes frequently anyways. What is ranked highly today might be wholly different in a week or two. 

Hey! Congrats. Out of curiosity have you priced in the costs for the city certification and the costs associated with that? I would price in the initial inspection and the lead testing at the very least. 

While I do think Detroit is making great strides (the development of the downtown core cant be debated) the questions of how far the development spreads is fair. Large portions of the city have almost non-existent infrastructure and blight is rampant. All the different scandals that are plaguing the Land Bank and the ACTUAL results of their demolition program just show how far the city needs to come regarding how things are ran. I dont think progress will be concrete for a lot of Detroit's citizens until the downtown bureaucracy gets its head out of its ***. There are very valid reasons to say Detroit is on an upswing right now - I just fail to see a tangible trickle down for many of the neighborhoods.

In general I am also VERY bearish on the US economy in the mid/long term. I think the upcoming death knell of retail coupled with the increase in automation across multiple industries will put an incredibly strain on the majority of the residents living in Detroit and some of its suburbs. I wouldnt be surprised to see an uptick in foreclosures in the next few years.

Lastly, I also take a lot of things that Dan Gilbert says about Detroit with a grain of salt. Putting aside the VERY direct financial incentives he has, he needs quality people to move to Detroit for his businesses. His recruiting is directly tied to painting a rosy image of Detroit. I dont think he has his finger on the pulse of the issues that effect the majority of Detroiters. 

@Nick C.

In addition I would do a bit more research to how section 8 works in your area. People get kicked off section 8 all the time, their portion changes etc. In addition you usually need decent amounts of money to keep the house passing annual section 8 inspections and make sure the house dosent go into abatement. 

@Nick C. +100 to this advice. 

Detroit has an interactive map where it shows all crimes and when they were reported. Ive never used this to make decisions about anything but Im a data nerd and find it really interesting. 

https://cityofdetroit.github.io/crime-viewer/

I would come here and drive around since you live in the country. You will realize that Detroit isnt about neighborhoods. We always say Detroit is block by block - the difference between a good block and a bad block is vast. As a first time investor the near suburbs might be a better bet.

Additionally (and very importantly) I would make sure you are well versed in what is going on with the city certification process right now. Its costly and time consuming, and a lot of people have just straight up opted to sell instead of deal with it. If you are looking for PMs and they dont give you an in depth run down of how they manage the process I wouldnt even consider them.