Originally posted by @Janann Chan:
Thanks for the advice Richard. I've send you message.
Could anyone share some of your opinions?
Thanks
If you are investing from HK(my wife's family is from Shenzhen), you see the cheap houses and are tempted. Some people here on BP might say I'm a Detroit Cheerleader, then some might even say I'm an "Elitest". But I just care about making money. I know some people on BP working the neighborhoods in Detroit and are doing well. I frankly don't have the stomach for it. I like my tenants to be tech savvy paying their rent, or repair reimbursements receipts via Online Bill Pay, Corresponding completely via Text, Messenger Services. I go months at a time without seeing or speaking to my tenants. I know at this point my business model won't work lots of Detroit neighborhoods. It doesn't work in lots of Detroit suburbs.
I love the Woodward Corridor, thats my thing. I advocate for the "7.2" thats the Downtown and Greater Downtown Area in terms of sq miles. I believe the best value is in the larger older homes. These properties can be cut 2-4 or more ways. I see the value in the $70K-150K range in terms of money you will be into a property before you collect rent. Why?
1) You bought the property at a much lower price, the Property will go up in value immediately as you start improving it.
2) You own the Property outright most likely, meaning no mortgage.
3) You generate great cash. Realistically, 75K-150K will generate 1300-4000K a month.
4) You have a large possible tenant base. These people make enough money to live anywhere in Metro Detroit, they are curious about The City. They have easy to verify income, and you as a landlord can provide large living spaces, in-unit laundry, and throw-ins such cable or internet. So people make the decision do I want a 2 bedroom condo in Royal Oak for $900/mo thats 700 sq ft w/shared laundry, or a 1100 sq ft flat in Detroit that includes Heat for $1000. 10 years ago RO won even though that Detroit unit was probably $600(I went to Wayne State and lived on and off campus for 3 years). Because there is just a semblance of jobs and economic activity people are giving Detroit a shot, but in limited concentrated areas.
5) You get a chance to really see how to function effectively in a place where dysfunction is normal. You really learn about taking ownership of something. At my other homes in other cities the sidewalks are always shoveled, the grass gets cut, the street gets cleaned, etc. At my Detroit units, my street may be dirty, but sometimes you have to get out there and clean it yourself, because ultimately its your property, and no one is going to drive by and say "Wow the street in front of that house is clean, or the that house's yard is always cut", they will drive-by and see your neighbor next to you(or vacant lot in many cases ) that is unkempt, and it verifies what they believe/see about Detroit.
6) Lots of older people and families have held onto property for years in the City, and I haven't personally been able to benefit, but I have friends and associates where they fixed up a property on a street, and a neighbor will approach them about taking their's for a very reasonable price. They know a bank won't loan against it, and they don't want the house vacant and the scrappers get to it, so they see someone who bought and invested in the neighborhood they rather you have it than anyone else.
