Why Do You Invest in Detroit? (Testimonial Request for BP!)

Rental Property Investor · Denver, CO · Member since 2016 · 86 posts · 160 votes

BiggerPockets! I work at BP and I'm working on building a landing page for Detroit. Would anyone be willing to share why you choose to invest in the city? Why is it a great city for investors?

2 Reply

22 views

Most Popular Reply

Dylan TanakaPro Member

Real Estate Agent · Detroit, MI · Member since 2008 · 455 posts · 178 votes

@Lauren Hogan Detroit’s comeback is absolutely unprecedented. From the late 60’s through early 2010’s there wasn’t much to brag about.

Since the Foreclosure Boom ended values in some neighborhoods are up 500%. I’m not talking about $500 houses you can buy from the city. I’m referencing areas like East English Village where sales gage been touching $300,000 after amazing rehabs and they words purchased for 30k.

Suburbanites in their early 20’s and empty nesters are moving into the city to make it their home.

Investors from the suburbs who would “NEVER” flip in Detroit are now begging wholesalers for properties in certain neighborhoods.

The city of Detroit is far from perfect but as a life long southeast Michigan resident and 17 year real estate investing veteran I’ll say this: Detroit is in a position it hasn’t been in to close to 100 years. Anyone looking to invest should take a serious look.

11 Reply

See this reply in the discussion

22 Replies

Jump to latestLatest

Sort by

Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
6y
@Lauren Hogan: We help investors do Detroit right!
Most investors are interested due to the relatively low entry price - houses are cheap in Detroit. Correspondingly, rents are relatively high - rent / price ratio easily exceeds the 1% rule.
So, it all boils down to attractive ROI and Cash-on-Cash returns that you can't find in many places.
Unfortunately, many investors don't take the time to fully understand the risks involved: theft, squatters and low-demographic tenants.
[email protected]248-209-6824
Logical Property Management4.9451 Reviews
Website View Page
9 Reply
Rassan Sampson
Westminster, CA · Member since 2017 · 43 posts · 39 votes
6y
I chose to invest because as I was becoming more interested in real estate I was visiting Detroit frequently for family and work. I saw good potential which was unexpected because the reputation is awful but just like every large city there are good neighborhoods and I was able to drive through a few several times.
It's also much more affordable than my local market and I figured if I can get my investments working there, I can probably figure out other higher markets later if needed.
6 Reply
Joe HammelBusiness Member
Real Estate Agent · Metro Detroit, MI · Member since 2018 · 612 posts · 666 votes
6y
Hmm, are we talking about just the City specifically or all of Metro? The Detroit bordering suburbs seem to be where you can find that sweet balance of cash flow, lower maint, and 1.25-1.75% deals.
From what I see, in the City, the ROI can be crazy with a low price point, and if you're betting on appreciation (not my personal strategy)..some people very well could get rich quick some day..
[email protected]248-422-1685
FIRE Realty Team - Keller Williams5377 Reviews
Website View Page
5 Reply
Dylan TanakaPro Member
Real Estate Agent · Detroit, MI · Member since 2008 · 455 posts · 178 votes
6y
@Lauren Hogan Detroit’s comeback is absolutely unprecedented. From the late 60’s through early 2010’s there wasn’t much to brag about.
Since the Foreclosure Boom ended values in some neighborhoods are up 500%. I’m not talking about $500 houses you can buy from the city. I’m referencing areas like East English Village where sales gage been touching $300,000 after amazing rehabs and they words purchased for 30k.
Suburbanites in their early 20’s and empty nesters are moving into the city to make it their home.
Investors from the suburbs who would “NEVER” flip in Detroit are now begging wholesalers for properties in certain neighborhoods.
The city of Detroit is far from perfect but as a life long southeast Michigan resident and 17 year real estate investing veteran I’ll say this: Detroit is in a position it hasn’t been in to close to 100 years. Anyone looking to invest should take a serious look.
11 Reply
Isaura Orellana
Specialist · DETROIT · Member since 2019 · 116 posts · 243 votes
6y
The heard is coming !! Detroit definitely seeing an explosion of growth in the market and economy. My husband and I were just chatting with the manager and lead processor at Detroit Title and Escrow yesterday and they have just realized they NEED a third office because they are backed up like they haven’t been in years...When the top Title and Escrow company realizes you need to expand to a third office in the dead of winter in Detroit Michigan, and well that’s not a dead give away to you perhaps you best stick to the monopoly board....And that’s just the tip of the iceberg .. Our sales are way up, we have FIVE contracting teams going full tilt for us at the moment in February lol .. Buy as much as you can before it gets warm thats all I’m going to say..... Rents are also way up and Renters are lined up down the street and around the block to rent any place with even the slightest hint of curb appeal. Not a day goes by when renters are asking us if they can move into our properties. The lady from the water company even emailed my husband randomly last week asking him if he had an available property for her to move into...... “Hello,
Mr. Darren, my Name is Monea. I helped you a week ago pertaining to water accounts. However, I am reaching out about rental property. I'm a young female early thirty's work for the City of Detroit and in school. I am looking for a nice east-side home to rent for me and my tiny family, spouse and small age son“...... ANYWAYS, HAPPY HUNTING AND GOOOOO DETROIT !! :))
10 Reply
Matthew John
Rental Property Investor · Metro Detroit, MI · Member since 2016 · 277 posts · 269 votes
6y
We live in one of the best cash flow cities in the US!
There's tons of jobs, a strong tenant base, low barrier to entry, and rents are achievable in the 1-2% range. Every time I list a property, I'm getting people reaching out saying they are moving here from out of state for a job opportunity and usually comment about how cheap the cost of living is here.
I don't see this slowing down anytime soon!
10 Reply
Alex KhanPro Member
Specialist · Southeast Michigan · Member since 2015 · 300 posts · 244 votes
6y
Originally posted by @Lauren Hogan:
BiggerPockets! I work at BP and I'm working on building a landing page for Detroit. Would anyone be willing to share why you choose to invest in the city? Why is it a great city for investors?

Hello, Detroit is a great place to invest! It is my backyard and I’ve seen it go from a complete dead zone in many areas to all new construction and redevelopment within the past 5-7 years. I remember parts of town in 2010-2012 that were considered war zones and I wouldn’t want my mother or wife to even drive through These areas during daylight hours. Prices were around $500.00-$5,000.00 on Houses. Now those same neighborhoods Which were once the Mac daddies of war zones are going for $100,000-$250,000+ aka Morningside, East English Village, Bagley, Jefferson & Chalmers, North end and many more.
Being in the millennial age group myself I understand That we must focus on the future ahead for our investment strategies and cater to the market we are targeting and the new and upcoming generations.

Many millennials are moving back to the city because it’s the “cool” thing to do!
Detroit is a strong Rental market that is for-sure! We still have many gangsters in the city some aren’t bad and some are just horrible! But it’s nothing like what it once was. The city of Detroit has launched the green light initiative which streams live video directly to the police stations for areas that were war zones. This initiative has reduced crime significantly.
Where are all the trouble makers moving to? They’re moving to C- D+ suburbs outside of the city while the Millennials are pouring in.

Detroit has significantly ramped up demolition of blighted properties and construction of the roads and infrastructure.
The Automakers have doubled down on The innovation, design and production of the new Electronic vehicles and developments.
We have seen many big name companies and corporations come to town such as Microsoft, Google and Waymo.
Detroit was one of the biggest cities in It’s prime and it’s built and setup for production.
Detroit is also one of the main reasons our great country is what it is today. During world war 2 the automakers and the city put their differences aside and brought forth the production of artillery and weaponry. This is why we were able to conquer and defeat enemies as well as outproduce any other country in production of tanks and artillery. Without the Motorcity there’s a good chance we wouldn’t have the freedom and luxuries of The Great United States 🇺🇸.  So raise your glass one time for the Motor City!

Detroit also has access to international waters with the port of Detroit.
We all think of Fresh water as a right and although this may be the case in present times there are many studies that show something else. Many major us cities and states west of the Rocky Mountains have already faced shortages of fresh water and these issues aren’t broadly forecasted in the news as they should be.
In Detroit Michigan we are surrounded by the Great Lakes which make up one of the largest sources of (unfrozen above ground)  Fresh water.

Once a city Has hit rock bottom the only way to go is up especially a city like Detroit.
Time is changing and so is the world, We must adapt and cater to that change if we want to be successful in our businesses and investments.
With all of the new Electric vehicles coming into the market they need to be produced somewhere and what better place than The Motor City itself which is built for it.
My team and I are strong believers and supporters in the comeback of our city and have made careers out of it. From actively flipping to first time homebuyers and investors flying in every week to Buy and holds for our family’s portfolio to pass down to my children and grandchildren like my father did for us.
Being 27 years of age and a full fledge investor in the Detroit Market for the past several years the only regret I have is not starting sooner. On the bright side I believe I am young enough to get in now while there is still room for plenty of growth; this way when I’m in my mid 40s I can come back and tell everyone in their 60s and 70s “told ya so” (I already do this to people and family that have previously doubted investing in Detroit) I have gotten many to change their perspectives already by example.

If anyone is interested in the Detroit Market; my team and I fully support you and the come back of our city!
Feel free to connect any time and Happy Investing!

God bless!

248-979-8119
8 Reply
Lamar Lee
Developer · Detroit, MI · Member since 2020 · 24 posts · 44 votes
6y
In the last four and a half years, we’ve built a portfolio of over 30 single family home rentals in the city of Detroit. Our Detroit portfolio fit the following guidelines for us:

Invest where we possess competitive advantages:
Our competitive advantage is our knowledge of the local market, operating systems, and boots on the ground, which enable us to operate effectively and profitably in a management intensive environment like Detroit.
Acquire assets on a value basis with a goal of maximizing return on capital.
Price is what you pay, value is what you get. We consistently earn 20-30% annual yields, on a total-capital-basis, on our single family home rental portfolio in Detroit.
Build sustainable cash flows to provide certainty, reduce risk and lower our cost of capital:
We invest in Detroit for 1. cash flow and 2. tax benefits.
We are willing to acquire assets that are more illiquid than most other investors, and hold our assets for longer periods of time.
We purchase income-producing real estate below replacement costs, which gives us a margin of safety during tough times.
Recognize that superior returns often require contrarian thinking:
Most investors prefer to invest in markets where credit is readily available. We are okay investing in markets like Detroit, where capital is scarce, as it typically is an indicator of value.
We are willing to trade liquidity (equity) for yield (cash flow), when the opportunity cost is right.
We utilize our competitive advantages to invest where others are reluctant to go, limiting our competition and increasing the opportunities available to us.

Despite the perception that most people have of investing in Detroit, the biggest challenge we have had to overcome in our Detroit rental business is the lack of financing options available for affordable housing in Detroit.
2 Reply
Brian Kantor
Investor · Brooklyn, NY · Member since 2019 · 185 posts · 205 votes
6y
There is nothing I can add that hasn't already been said by the other investors who've posted on this thread. Detroit attracts new investors (like me) for it's low cost of entry and seasoned investors for it's high appreciation and growing economy. As someone living in ultra-high cost-of-living NYC, it checked off all of the boxes for me with regards to an investible market.
0 Reply
Bud Ramkissoon
Real Estate Agent · New York City, NY · Member since 2012 · 42 posts · 4 votes
6y
Yes most of this is true.
I am also an investor in Detroit and I will continue to Buy.
You have to get he right team.
Price are going up.
0 Reply
Gary Carver
Realtor · Detroit, MI · Member since 2018 · 387 posts · 129 votes
6y
@Lauren Hogan. Great prices,ROI, Strong renter based
2 Reply
Kellan Martz
Attorney · Los Angeles, CA · Member since 2015 · 65 posts · 51 votes
5y
@Dylan Tanaka thank you for that assessment on the region. I have investment properties in Cleveland but am looking to branch out. Detroit is the top of my list.

0 Reply
Olu Lijadu
Member since 2020 · 42 posts · 12 votes
4y
@Rassan Sampson

Hi Rassan, I know it’s been a while since you posted your last message. Are there still good deals out there in Detroit and can I ask if you are still investing there? Thx
0 Reply
Rassan Sampson
Westminster, CA · Member since 2017 · 43 posts · 39 votes
4y
@Olu Lijadu I haven't looked at prices for quite some time so I can't speak to the deals available but I am still invested and hope to start growing my portfolio in the next couple of years in Detroit and/or the surrounding areas.
1 Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
4y
@Olu Lijadu prices have gone up in Deroit like the rest of the country, but there are still better deals here than anywhere else!
[email protected]248-209-6824
Logical Property Management4.9451 Reviews
Website View Page
1 Reply
Bud Ramkissoon
Real Estate Agent · New York City, NY · Member since 2012 · 42 posts · 4 votes
4y
I invest in Detroit because prices were cheap and rents were ok.
I was making the 1 % in all my rentals.
Like any market you have to get the right team.
0 Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
4y
You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

https://www.biggerpockets.com/...
[email protected]248-209-6824
Logical Property Management4.9451 Reviews
Website View Page
1 Reply
Bud Ramkissoon
Real Estate Agent · New York City, NY · Member since 2012 · 42 posts · 4 votes
4y
@Drew Sygit
Thanks I will.
Appreciate this.
1 Reply
Alex KhanPro Member
Specialist · Southeast Michigan · Member since 2015 · 300 posts · 244 votes
4y
Detroit Michigan is Getting Better By the Day, I was just Visiting Some of My old Sites Last week and it truly amazes me how far the City has came from Implementing the Amazon Partner Program From Brownstown Michigan to DTW to Taylor, To Redford, To old Redford, stretching Back to Belle Isle where it all Started!
IF You know Detroit like I do or anyone one my Associates they will all Tell you the same and if they don't then they should come to town and see for themselves and Id be happy to send one of my tour guides to show them around!

Happy Holidays and Have a Blessed New Year to all Michigan Investors!

See ya!

248-979-8119
0 Reply
Alex KhanPro Member
Specialist · Southeast Michigan · Member since 2015 · 300 posts · 244 votes
4y
Originally posted by @Drew Sygit:
@Olu Lijadu prices have gone up in Deroit like the rest of the country, but there are still better deals here than anywhere else!

I agree!
248-979-8119
0 Reply
Alex KhanPro Member
Specialist · Southeast Michigan · Member since 2015 · 300 posts · 244 votes
4y

Not bad for Chief 6 except for the turn signals!
12/27/2021
For Any Property Management Emergency Please contact: 248-403-9003
I will be back in the Office after the New Year!

248-979-8119
0 Reply
Bud Ramkissoon
Real Estate Agent · New York City, NY · Member since 2012 · 42 posts · 4 votes
4y
Thanks.
Great
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.