Hello BP Family,
This is my first post so please forgive the long story. I just like many am looking to invest in the great city of Detroit. I am an out of towner in CA and spent this past weekend visiting the city and you can FEEL the revival in some neighborhoods.
If I may I'd like to share my experience thanks to the post of @marisa long running blog. Literally hoped on the next flight to see Detroit for myself.
During my short 3 day stint I was able to talk to crews on the grounds working on projects in the Boston Edison Area, randomly have a friendly new owner walk me through his gutted Atkinson historical home while picking his brain for about an hour. This proved to be vital information as things to consider with older historical projects is bringing things up to code which includes heating, electrical, plumbing, mold issues and if you are in the historical area things such as Windows have to be approved by the district. Remember these homes are nearly a century old and require major rehab. The owner explained that he had purchased the property through the DT land bank for about $20k and had already doubled his rehab budget to $160k as he was a former contractor and was DIYing most of the house from the ground up. I was floored but when he explained that the asking price of the homes on the block were asking $380-420K, I could see the potential and motivation there. He couldnt stress enough that it is vital to either have a crew with a TRUSTED project manager or move to DT and consider the tasks to be pretty hands on especially for first timers. Again this coming from a 30 year veteran contractor. It was a fun experience and took a few photos of the journey.
I was also able to check out a SFR in the up and coming area of Fitzgerald/ Bagley. For my fellow BP, I would consider this area as it is between to major colleges and some of the homes are just darn beautiful with the heavy price tag as others. However, it is still Detroit, and during my visit to this particular below market SFR I visited it came as my surprise that it had broken into several times by squatters. From what I was told by the realtor is the homeowner is an out of country investor, has never lived there and has never seen the property first hand. My initial impression was that the rehab appeared to be about 70% complete and they either ran out of money or gave up on the project entirely. But NO the interior work had been done by the squatters as they had lived there so long that they put "sweat equity" into the place to make it there own, even doing the lawn. However upon inspection you could see the back door had been KICKED in, the screens/windows popped out, and all appliances were missing even the TOILETS. However, I tell you the place was really nice but personally, it put me into a state of shell shock with respects to vandalism, squatters and the legal process entailed with all of this. I heard things of such, but it is different when you see the remnants.
I was also able to link up with a pasi realtor and see about 4 properties in the Fitzgerald/Bagley (highly recommended), a duplex in the neighborhood of Russel Woods (lots of blight and not much activity) along with a couple of duplexes in the Petosky-Ostego area (lots of blight and not much activity neither, rather depressing). The great thing is we were able to have the owner actually walk us through all of the areas of his homes and see that he had several that he would be interested in selling.We spent most of the day going through the "ins and outs" of his properties and tenant stories. I was excited about acquiring the properties but kept my emotions in check. Also, things to consider is that these properties are in neighborhoods that I would not necessarily consider up and coming, nor personally live in, but have been modestly updated and already have %100 tenant occupancy with marginal cash flow. But again, I had to keep my emotions in check and today have ordered a third-party home inspection on the properties as it is common for investors to go all in, BEFORE taking a step back, researching and conducting as much due diligence as possible before executing a purchase agreement.
My takeaway with Detroit is yes there is a glass half full level of optimism and you really NEED to visit Detroit for an extended amount of time and really understand the culture here and network with as many people as possible and don't be afraid to literally invite yourself to a conversation with someone on their porch as you will be surprised what you will learn.
PS- A repeat tip that was told to the 8 or so people that I chatted with this weekend is check out the Detroit Land Bank for cheap lots and make sure you do your title search for any liens, back taxes or unpaid water bills.
Thank you again @marisa and the fellow BP community. Im excited to jumping in feet first and learning as much as possible.. I will be BACK in the Detroit if anyone will be around to network and get to know.
Thank you for reading!
@Marisa R.undefined
