is detroit MI really a block by block area?

Question

I have heard many investors invest in Detroit , Michigan

Is Detroit really a block by block area meaning zip codes don't dictate in class neighborhoods?

Is Detroit a good investment? homes don't seem to be in great shape and block by block homes all seems to run down.

Interested to what you investors think!

Thanks ,

Allen

Drew Sygit · Answer

@Josh Mitchell PM us for that please:)

Josh Mitchell · Answer

Travis, as an OOS investor who is actively involved in the Detroit market, how have you come to understand the market in determining which areas you’ve concentrated your investments?

Josh Mitchell · Answer

I too am looking at Detroit as an OOS option and would love to see your neighborhood info. I’m just beginning the process of considering OOS properties so any guidance is greatly appreciated!

Drew Sygit · Answer

@Allen Zhu as others have already commented, using zip codes is not a sound strategy.

For the City of Detroit (please don't mix the city & the suburbs!), using zip codes will lead to disaster.

What we've found though is, "block-by-block" is too granular for OOS investors and "scares" them away:(

So, what we've done is ranked the City of Detroit's 173 neighborhoods as Class A, B, C or D for OOS investors.

It's still not perfect, but it's way better than using zip codes and easier to evaluate than block-by-block!

We highly recommend though, having a local expert that you can run addresses by, to confirm the target property in on a good block before signing a purchase contract. That expert should also be engaged to review any inspection report you obtain, to ID potential issues.

PM us if you'd like the Neighborhood info.

Travis Biziorek · Answer

Yes, absolutely it is.

You're better off using specific neighborhoods over zip codes. For example, Morningside is a small section of the 48224 zip code. I own 5 homes there.

But there are sections of 48224 that I would deem not investable still today. There are also sections of Morningside I would steer away from. You can be in that neighborhood and have $250,000+ homes and you can be in that neighborhood and have $75,000 homes.

That's a tame example. Go to Dexter-Linwood and you'll really get a taste for how fast blocks can change.

This is the challenge, but also the opportunity, in Detroit today. If you understand the market you can position yourself in the path of growth, revitalization, and investment.

If you don't... you could end up in a D Class area because you bought in a bad section of a zip code that someone blindly told you was "good".

Denis Ponder · Answer

There are people here with extensive experience in the area.  I'm sure they will chime in.  Detroit is intriguing to me and from the folks I have connected with, I see value there.  But from those conversations I have learned it is block by block.  Definitely connect with someone knowledgeable.

Sarah Brown · Answer

I would not use zip code to determine neighborhood class in any state.  Most states have areas that are block by block.  I imagine this is especially true in Detroit given my understanding of the area.  I would find an agent in the area that is familiar with the area and investing.