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  #21  
Old Posted Aug 13, 2019, 4:42 AM
lio45 lio45 is offline
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Originally Posted by JManc View Post
In Manhattan, they'd be worth millions.
Maybe this one could be flipped / re-sold sight unseen as a "Gorgeous New York (State) Brownstone!" to a Saudi sheikh who thinks he's investing in Manhattan and getting a good deal.
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  #22  
Old Posted Aug 13, 2019, 4:47 AM
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Investing seems scary. We own a rental townhouse and that has exploded in value and is almost worth as much as our primary home. But we were lucky that part of town is hot. I would love to get into real estate.
Was that really just only dumb luck on your part, or was it possible to forecast that that part of town would likely increase in appeal and value? I'm strongly leaning towards the latter, unless you insist on the opposite.

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I would love to get into real estate.
Technically, you're already into real estate, and you even have a good track record so far with that well-located investment townhome of yours.
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  #23  
Old Posted Aug 13, 2019, 10:39 AM
Kenmore Kenmore is offline
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michigan is probably a great place to park money for the long run given all the freshwater and climo benefits
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  #24  
Old Posted Aug 13, 2019, 11:43 AM
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I would not invest in Detroit unless you know the local nuances. There are lots of stories of, say Egyptian or Dutch investors buying 100 Detroit homes sight unseen. These people know nothing about the city/metro, and the locals who know the block-by-block nuances will eat their lunch.

Speaking generally, these homes are cheap for a reason. Detroit has had terrible appreciation over the last 60 years, even though there are positive bursts every 15 years or so, when the latest "revitalization" sets in. If you hold Detroit RE long-term, you're likely to be disappointed.

And the Zillow home is probably worthless. It's in one of the least desirable parts of Detroit, next to a freeway, near a giant polluting incinerator, and surrounded by abandoned factories and bombed-out ghettohoods.
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  #25  
Old Posted Aug 13, 2019, 12:59 PM
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And the Zillow home is probably worthless. It's in one of the least desirable parts of Detroit, next to a freeway, near a giant polluting incinerator, and surrounded by abandoned factories and bombed-out ghettohoods.
The Zillow home's Zillow listing specifically states it has fire damage and needs to be demolished.

As for me, yes, I would absolutely invest in Detroit. I would buy the very worst houses in the very worst neighborhoods, restore them faithfully and beautifully, and plant flowers in the front yards. My goal would be to instill a sense of menace and mystery: Who lives in that? What are they doing in there? My inspiration is a character in one of the Anita Blake novels of Laurell K. Hamilton -- one of the good ones back before her books just turned into out-and-out porn. The character was a powerful witch who lived in a bombed-out, gang-controlled neighborhood in St. Louis. Her house was surrounded by desolation... but also by red and white geraniums in the front yard, blood and bone, and everyone knew to leave her alone because anyone who crossed her ended up a component of one of the undead abominations that she kept in the basement.

So, yes. I need a place to stitch together undead abominations, magically reanimated, and consisting of up to ten individuals at a time, and nothing would be better than the last house on some windswept block in Detroit.

Plus flowers. There have to be flowers in the front yard. That's a crucial element.
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  #26  
Old Posted Aug 13, 2019, 2:09 PM
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BTW, the exact same seller owns the other one on the same block, which is for sale as well using the same arguments.
("Wonderful redevelopment property. Already zoned commercial mins away from Wayne State, new center, downtown and Hamtramck")

https://www.zillow.com/homedetails/3...88619793_zpid/

I don't believe any of the two would need to be demolished but the seller can have his opinion (it's well-located commercial land, according to them, so even a reasonably salvageable house would be "in the way").
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  #27  
Old Posted Aug 13, 2019, 2:13 PM
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Originally Posted by Crawford View Post
Speaking generally, these homes are cheap for a reason. Detroit has had terrible appreciation over the last 60 years, even though there are positive bursts every 15 years or so, when the latest "revitalization" sets in. If you hold Detroit RE long-term, you're likely to be disappointed.
Though these positive bursts are almost certainly better for value gain ratio than any investing in higher-value stuff. A house you bought for the amount of taxes due on it can be worth ten times what you paid a couple years later; you won't ever see that in "normal" RE investing over such a short time frame.
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  #28  
Old Posted Aug 13, 2019, 2:17 PM
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Originally Posted by Crawford View Post
I would not invest in [place] unless you know the local nuances.
[...] the locals who know the [...] nuances will [generally] eat [the] lunch [of those who do].
That's solid advice that's not even city-specific.

If you don't know an area well, you can still be lucky, but that's way riskier. (And there's really no reason to just choose an area you're closer to and more familiar with instead.)
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  #29  
Old Posted Aug 13, 2019, 2:38 PM
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There are beautiful, potentially undervalued areas in Detroit. If you're optimistic about the city's prospects, it would make sense to concentrate on the region's favored quarter, which is roughly North/Northwest.

This slice of Detroit has lots of formerly medium-to-high end neighborhoods that have languished for 50 years. There are no factories, giant freeways or noxious uses. The neighborhoods are rundown but have pretty good bones. The best suburbs are minutes away. It's generally the old Jewish-WASP corridor, though African American since the 70's.

Bagley Neighborhood: Used to be Jewish, still middle class black, still looks pretty good. Terrible schools, limited retail and some safety issues, though-

https://www.google.com/maps/@42.4253...7i16384!8i8192

Russell Woods: Similar to Bagley, but cheaper, rougher, and Jewish flight was 20 years earlier. Still has great bones and closer to downtown. Very close to crack central in the 80s-90s (Dexter Davison) but that area is bombed out now and calmer. Probably better upside than Bagley-

https://www.google.com/maps/@42.3826...7i16384!8i8192

I could see these areas gentrifying, maybe becoming gayborhoods or popular for childless couples. But I think it's a stretch to think that professionals with kids will move here anytime soon. Metro Detroit has endless spacious brick home neighborhoods (thanks to high mid 20th century salaries) in established suburbs without school or safety concerns.
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  #30  
Old Posted Aug 13, 2019, 2:54 PM
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I would invest and I would build high-speed rail right to Chicago. It would explode after that
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  #31  
Old Posted Aug 13, 2019, 2:59 PM
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I would invest and I would build high-speed rail right to Chicago. It would explode after that
Why would Detroit RE values "explode" if you added HSR? How does that make any sense?

Baltimore is on the Acela, and no "explosion" there. Philly is pretty much tied for 2nd with DC in Acela ridership and no "explosion". And those are centralized metros.

Most of Amtrak's Metro Detroit ridership is from suburban stations, in Ann Arbor, and Oakland County, where RE valuations are fairly high.
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  #32  
Old Posted Aug 13, 2019, 3:05 PM
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Originally Posted by maru2501 View Post
I would invest and I would build high-speed rail right to Chicago. It would explode after that
Yet there are tracts adjacent to the Green Line on the south side of Chicago only 20 minutes from the Loop which remain vacant.

Trust me. Property values wouldn't "explode" if there were HSR to Chicago.
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  #33  
Old Posted Aug 13, 2019, 3:59 PM
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Originally Posted by lio45 View Post
Was that really just only dumb luck on your part, or was it possible to forecast that that part of town would likely increase in appeal and value? I'm strongly leaning towards the latter, unless you insist on the opposite.


Technically, you're already into real estate, and you even have a good track record so far with that well-located investment townhome of yours.
It was a previous residence that we decided to hang on to and possible move back to. The house we live in now is too big for two people. It was dumb luck the property values are as good as they are where the townhouse is. It's a block or so from NASA and they've seen better days...
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  #34  
Old Posted Aug 13, 2019, 4:00 PM
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Would I? Yes. In fact, I am seriously considering it. But I'm from there, I have family there, and I follow the local news there fairly closely, so I understand the local culture. I may also be a little bit of a quasi-expert on gentrification, since I've witnessed the gentrification cycle in different parts of NYC over the past 13+ years. Would I recommend others to do it? It depends...

I met someone on a flight from Detroit to NYC last year that lives in NY but owns and manages real estate in Detroit. He had no prior connection to Detroit before he jumped in... Which I thought was extremely scary. But he spends a lot of time traveling there, instead of just managing it from afar, so it may work out for him. But there are some nuances to Detroit's real estate market that outsiders don't typically understand.

On the other hand, I think the only way to really stop Detroit from turning into a complete urban prairie is for naive outsiders to flood into the market. Pre-Dan Gilbert era, the key power brokers, in both the political and business communities, have been at best indifferent to the state of the city, and in many cases even hostile to it. But there is definitely a paradigm shift going on now that might make the future unlike the past. There are certainly a lot of naive outsiders flooding in, for sure.
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  #35  
Old Posted Aug 13, 2019, 5:35 PM
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broadly speaking there are going to be good real estate investment choices in almost every core city of a large metropolitan area if you know where to look. Even within what would be the bottom third of the market.

In general though I think being an "absentee investor" - buying property for speculation, flipping, or to rent out - outside of your home metropolitan area is a bad idea if you're an amateur with limited financial resources. You lack the level of market knowledge a local would have, and have to hire third parties to do virtually everything for you - cutting down on any return you might see.
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  #36  
Old Posted Aug 13, 2019, 5:40 PM
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i cleaned up the thread to get rid of the trolling and stupidity.

just stay on topic and answer the thread question.
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  #37  
Old Posted Aug 13, 2019, 5:40 PM
lio45 lio45 is offline
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Yeah, the OP is trolling for sure.
The original post has been written in a more teasing way than strictly needed, that's obvious, but it doesn't mean an interesting discussion can't be had.


Quote:
That said, broadly speaking there are going to be good real estate investment choices in almost every core city of a large metropolitan area if you know where to look. Even within what would be the bottom third of the market.

In general though I think being an "absentee investor" - buying property for speculation, flipping, or to rent out - outside of your home metropolitan area is a bad idea if you're an amateur with limited financial resources. You lack the level of market knowledge a local would have, and have to hire third parties to do virtually everything for you - cutting down on any return you might see.
Many of us so far have agreed with this. Instead of "Detroit", choose the area of your home metro that you believe is the most undervalued at the moment compared to its potential.
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  #38  
Old Posted Aug 13, 2019, 6:58 PM
IrishIllini IrishIllini is offline
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Out of towners speculatively investing in Detroit because properties are inexpensive is probably going to do more to hurt the city than help it. Chances are none of us would do much to improve the property. We’d all be sitting on our hands waiting for the other guy to make a splash in hopes of cashing out and because of that, nothing would ever happen. I’d be surprised if this wasn’t already a problem in the city.
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  #39  
Old Posted Aug 13, 2019, 7:12 PM
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Originally Posted by Kenmore View Post
michigan is probably a great place to park money for the long run given all the freshwater and climo benefits
Exactly, which is why I don't understand people here being apprehensive about investing in Detroit. I would invest there myself if I had enough money.
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  #40  
Old Posted Aug 13, 2019, 7:41 PM
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Exactly, which is why I don't understand people here being apprehensive about investing in Detroit. I would invest there myself if I had enough money.
Okay, gather around kiddies from some quick pointers about macro trends in Detroit.

Surprise, surprise on this one, but Detroit is uniquely exposed to boom/bust cycles because of the singular focus on the auto industry. There has been a bit of industry diversifying over the past decade, but it is still a region susceptible to the whims of the auto industry. The next recession might give us some clues on how well Detroit has done in diversifying.

Another major risk - IMO the most major risk - is that lack of regional controls on sprawl has worked against existing land and property owners, mostly for the benefit of greenfield developers in the suburbs and exurbs. One such example is a policy in Michigan that allows rural townships to borrow money for infrastructure expansion based on projected property tax revenue on not yet built developments. In other words, a rural township can borrow to expand sewage and roads for a new Walmart and housing development based on the theoretical revenue that may come from the Walmart and property taxes on the new houses. It is an insanely stupid policy to have in a slow growth region like Detroit, and during the housing collapse that speculation caused severe financial distress for some of those townships. Ironically, on the other end of that spectrum, the same recession ultimately pushed Detroit into bankruptcy.

The recent uptick in preference for an urban lifestyle has pushed a lot of energy back into the core Detroit real estate market, but the Detroit area's propensity for sprawl will always be a major risk factor for real estate investment in Detroit.
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