All Forum Posts by: Travis Biziorek

 LOL.  Travis, Travis, Travis.

If you read other posts I've written, and between the lines, you'll see that I have always been a big defender of Detroit.  Please don't assume that a defender must defend everything to be one, or that someone that warns an out of towner that what they think they are walking into, isn't what they will be walking into, is somehow a "Hater".

REI in Detroit can be lucrative, but the smaller you are, and the smaller your power (spelled "access to cash"), makes it harder to be successful (notice the word "harder" isn't spelled "impossible"). This is why I tell them to invest outside of Detroit first.

 @Travis B and @ Alex D

What you are experiencing is one of the most frustrating, and biggest obstacle Detroit has had over the last decade...the "Headline" readers.  They have never, and will never, ever, come to Detroit to actually see it first hand...but they are experts on the city...just ask them. I can't tell you how many REI I have taken around the area from out of state, that changed their minds about investing in the area. All they needed to do was drive downtown and experience it...from out of their car, and off of Google.

Let me think about this.  Detroit has how many neighborhoods, and he named 10 as being bad.  How many cities the size of Detroit have at least 10 bad neighborhoods?

As a born and raised Detroiter, it kills me to have to constantly defend the current Detroit as not being the same Detroit as it was a decade ago.

Detroit has had to climb over all the previous years, Mayors, City Councils, etc...that have legitimately placed negativity (at the time) on Detroit.  Not anymore.  Detroit has changed by leaps and bounds over the past decade, but the only ones that really appreciate it are the locals...and by that I mean those living in Michigan...specifically SE Michigan.  

Detroit has become a REI goldmine, but it isn't a place I would recommend out of state investor to come to...at least not yet...unless they had $M's of dollars, and partners with boots on the ground, and with great knowledge of the area....like 2 people that come to mind right now ;-).

Gentlemen...and others.  Keep fighting the good fight.  As frustrating as it can be, the rewards...

@Mike M. 2,000 violent crimes per 100,000 people not bad man. Not bad at all. I’ll take it.

My question to you was if you have ever been to Detroit And not if you know how to copy and paste a 3 year old article from a random google search.

You should come on down to Detroit and check it out for yourself, I think you’ll have a blast.

@Travis Biziorek

Hi Travis, can you tell me the names of the lenders that you’ve worked with that are able to loan in the 25-60k range for rental properties? Live in Detroit but having a super hard time finding lenders that finance in that range. Any pointers/contact is much appreciated!

 Not really.  In order to use that strategy, you need to be able to get the loans.  Here's why that is a problem:

1 - You need to have a minimum of $50k (some won't loan in Detroit for less than $60k).

2 - The REFI amount is usually between 70 - 75% of the ARV.

3 - ARV bank appraisals can be very conservative in Detroit.

4 - Doing the math, to get a $50k loan, at 75% ARV, the property would need to be appraised at least at $67k.

5 - Between the initial property cost, rehab, back taxes, unpaid water bills, etc..., you're looking at higher than the $75k...but the appraisals would not be...unless you knew exactly where to buy.

6 - Those that have been successful, know where to buy.

7 - The Detroit Market is a checkerboard of micro-markets, where there are two adjoining markets, across the street can be a huge drop off.

8 - Out of State investors can (will) fall prey to faulty comps to validate lofty valuations of properties being sold...and thus will overpay.

9 - Rehab is very difficult...if you buy in the wrong areas, it can be almost impossible...and very costly.

10 - Then there are the tenants. There are some great tenants, but the smaller percentage that are not...will be extremely costly, drain any positive cash flow, and will put a huge strain on the REI.

 ...and you would be wrong on all accounts.  I was born and raised in Detroit.  I am downtown seeing many events (season ticket holder to Fox, etc...).  In the past few months I've seen both Waitress and Hamilton at the Fischer, and 2 Tiger games (painful as they were).

I have multiple REI friends that have been both successful, and not successful in Detroit. Both types thought they could overcome the problems...some did, and some didn't. Some were partners (on both sides). I speak from experience on both sides.

Detroit is not a place to invest without having a detailed knowledge of how, where and why the micro-markets are now, have been, and are moving to.  Just because I'm observant, and want to warn out of state investors about the problems they will encounter and are not aware enough about, doesn't make me negative.  I know how, where and when to invest in Detroit.  I also know that for the same money going in, the suburbs offer a better return...for far less problems.

Good point.

How long is a piece of string?

It will be dependent on many factors. For me I am following this market closely and there is pots of money coming into this State. Big players are throwing money this way, manufacturing is on the up and up...billions

What does this mean? more jobs, prosperity?  If rents increase I expect that this will also happen to wages?

You will also see people from other States move into Detroit because they can see opportunity for affordable housing and perhaps a better lifestyle for families

People can live in the past and poo poo Detroit till the cows come home, but those paying attention can make money riding the new wave.

I have said it before Detroit is on the cusp of a comeback and I wish I had jumped in earlier as many of the markets I like are already too expensive now. Just have to find the next best area that is gentrifying.