Another Detroit Property Management Problem

[Naga A.]

Well, I remember there was a thread a couple of days ago, started by a UK investor, about a property management problem she had with her property in Detroit.

I just happened to find out that a friend of mine (really, not me as I do not have any interest in investing in Detroit) got caught in a similar scam targeting at foreigners.

My friend is a Japanese citizen like myself who bought a duplex through another Japanese agent working in the Detroit market.

When he bought the property at $25,000, the duplex had two units occupied and rent paid for $450 each.The agent said that this property was located in a nice, strong rental area so it should be rented out quickly and claim a same or similar rent amount even if current tenants moved out.

Well, soon after he purchased the property, one tenant stopped paying rent so he had to evict him. Then, other tenant threatened to move out unless a rent being reduced to $325. That was a year ago. So, the other unit has been vacant for a year as of now. Instead of receiving $900 for rent, he has been receiving only $325.

The problem is that he is not very fluent in English and the Japanese agent refused to pick up a phone from him, so he asked me to help.

Is there anything he can do? I do not know anything about the Detroit market, but is the property really in a nice neighborhood?

The address of the property is 8945 Pinehurst Ave. Detroit, 48204.

[Nicole Williams]

When investing in Detroit (as an out of state as well as out of the country) you need a strong property manager, that KNOWS THE AREA to handle/assist. As I said in the Morningside thread, Detroit is a tricky place because how each neighborhood is so different. I know neighborhoods in Detroit right off the Southfield Freeway/Warren area that you would think you in Dearborn Heights but go down to ten or so blocks and it looks like a war zone, every other home is vacant. ( Speaking as a Metro Detroit Native)

I would suggest to your friend:
-evict the tenant who is refusing to pay the rental agreement price.
-if the home is up to code, GET THAT HOUSE ON SECTION 8 ASAP. That is a good way of making sure your rent is paid. (Average rent in the Barton/McFarland area is $500)
-if still having problems having problems, sell the property. He probably wont make a profit because the last 5 homes sold were between $24,000-25,000 thousand but at least he can relieve himself of the headache.

I know a few good property managers that can help and I know someone there that could help him sell. Best of luck to your friend.