Focusonthed Member Username: Focusonthed
Post Number: 103 Registered: 02-2006 Posted From: 209.220.229.254
| Posted on Wednesday, April 05, 2006 - 1:12 pm: | |
Thinking about buying some real estate in Detroit as investment property with my father in an owner/manager partnership. Aside from the well-known places like the new condos and lofts, etc, where are good areas that are still fairly cheap and good for investment property. I'm not looking to be a slumlord here, so no half-burned out HUD houses in bad neighborhoods. |
Tetsua Member Username: Tetsua
Post Number: 568 Registered: 01-2004 Posted From: 69.246.26.190
| Posted on Wednesday, April 05, 2006 - 1:19 pm: | |
There are a few HUDs in Rosedale Park (The NW side). Very nice neighborhood, and the homes are in good condition. They tent to get bought up pretty quickly. I'm looking to buy a home on this side in the next couple of years. |
56packman Member Username: 56packman
Post Number: 183 Registered: 12-2005 Posted From: 129.9.163.105
| Posted on Wednesday, April 05, 2006 - 1:27 pm: | |
Focusonthed--there is an exciting new oppertunity opening up to get in on the ground floor of the new Delrayo Rancho development. Just google that name.It's got nowhere to go but up! |
Eastsidedog Member Username: Eastsidedog
Post Number: 170 Registered: 03-2006 Posted From: 12.47.224.7
| Posted on Wednesday, April 05, 2006 - 1:29 pm: | |
If you're interested in houses for renting then Southwest Detroit near Mexicantown is growing and would probably be the best investment. I live on the lower east side by IV and it seems the surrounding area has a lot of potential for growth because of the Riverfront Development plans. Housing values have gone up a lot in the last 5 years but the weak economy is resulting in a lack of buyers so homes are sitting on the market for a long time. There's also alot of infill going on which is solidifying the neighborhoods. |
Bvos Member Username: Bvos
Post Number: 1375 Registered: 10-2003 Posted From: 66.238.170.33
| Posted on Wednesday, April 05, 2006 - 1:42 pm: | |
If you are looking to rent out the house as part of your investment strategy, don't look at Rosedale Park. Due to home values vs. the rent needed for debt service that sort of deal won't work out. If you are looking to flip a house in Rosedale Park and resell it, that would work. Be aware that the market has really slowed down in Rosedale Park. The only homes that are moving right now are the ones that have retained their original character and detailing. Be prepared to pay for quality materials and workmanship if you want to go this route. The flipped homes with cheap kitchens, cheap light fixtures and Wallside windows (i.e. it looks like the cheapest possible materials and shoddy workmanship - because it is) are staying on the market for over a year and barely breaking even in the end. It's real easy to tell a flipped house and a homeowner occupied house in Rosedale Park. I've talked to friends who do investment property in Detroit a lot in the past and they all say if you're looking for rental homes, look anywhere but the expensive neighborhoods. The neighborhoods with cheaper housing don't require expensive materials and finishes to look right and you can get more than enough rent to cover the debt ratio of the house. |
Blondy Member Username: Blondy
Post Number: 1004 Registered: 10-2003 Posted From: 68.252.70.118
| Posted on Wednesday, April 05, 2006 - 2:06 pm: | |
Check out www.modeldmedia.com, each week they have a different neighborhood guide, and each neighborhood guide has three sections, something like "Living, Moving and Investing". That might be a good place to start. |
Gildas Member Username: Gildas
Post Number: 517 Registered: 12-2004 Posted From: 147.240.236.9
| Posted on Wednesday, April 05, 2006 - 2:21 pm: | |
East English Village is a good area, many 2 fmaily flat at prices that will allow the property to cash flow. Rarely do properties here have "For Rent" signs up for long. Good area and decent property appreciation helps as well. Good Luck!! |
Focusonthed Member Username: Focusonthed
Post Number: 104 Registered: 02-2006 Posted From: 209.220.229.254
| Posted on Wednesday, April 05, 2006 - 2:53 pm: | |
No, there's no flipping. If mild renovations are needed, so be it, but this will be held for awhile, undoubtedly at least the 2-year cap. gains limit. I hadn't considered SW, I'll look into that. I think EEV and vicinity are great neighborhoods, what are the taxes like? That is a big consideration, as it can add hundreds of dollars to the rent price. I wouldn't care as much if it were for me to live in, but it's not, at least not right now. |
Gildas Member Username: Gildas
Post Number: 523 Registered: 12-2004 Posted From: 147.240.236.9
| Posted on Wednesday, April 05, 2006 - 3:41 pm: | |
Non-homestead taxes are the same anywhere in Detroit (as I understand it) it is based on property value. EEV and other communities are slated to get a property tax reduction (possibly) in 2007. We'll see what happens. All I can say is that a 2 flat in EEV can easily cash flow. I cannot speak for other areas. |
Kova Member Username: Kova
Post Number: 208 Registered: 12-2003 Posted From: 141.213.184.173
| Posted on Wednesday, April 05, 2006 - 3:48 pm: | |
any chance of letting in a third partner? |
Danindc Member Username: Danindc
Post Number: 1389 Registered: 10-2003 Posted From: 67.100.158.10
| Posted on Wednesday, April 05, 2006 - 3:58 pm: | |
Focusonthed, be aware that the capital gains exemption ($250k single/$500k married) only applies if the home has been your primary residence for 2 of the last 5 years. I'm not sure how that would work if the house would be strictly an investment property. On the upshot, though, you can depreciate investment property of a period of time. |
Gildas Member Username: Gildas
Post Number: 525 Registered: 12-2004 Posted From: 147.240.236.9
| Posted on Wednesday, April 05, 2006 - 4:02 pm: | |
Depreciate the property and then when you sell, as long as you do a 1031 exchange, and roll any proceeds into another property (the whole point of investing) then the taxes are deferred forever (if you do it right.) Kova, I'm always looking for a potential partner, pooling resources is the whole basis of the corporation. |
Dougw Member Username: Dougw
Post Number: 1064 Registered: 11-2003 Posted From: 136.1.1.33
| Posted on Wednesday, April 05, 2006 - 4:05 pm: | |
quote:EEV and other communities are slated to get a property tax reduction (possibly) in 2007. We'll see what happens. All I can say is that a 2 flat in EEV can easily cash flow. I cannot speak for other areas.
Correct, except noting that this potential property tax reduction (the NEZ designation for some older neighborhoods) would only be for homestead properties. |
Kova Member Username: Kova
Post Number: 210 Registered: 12-2003 Posted From: 141.213.184.173
| Posted on Wednesday, April 05, 2006 - 5:16 pm: | |
Gildas, toss me an email at nkovach AT umich dot edu im a young kid looking to get some first hand experience in real estate. |
Barnesfoto Member Username: Barnesfoto
Post Number: 1868 Registered: 10-2003 Posted From: 66.2.148.95
| Posted on Wednesday, April 05, 2006 - 7:21 pm: | |
I've done well in SW Detroit. Hubbard Farms and Hubbard Richard. When you buy something run down, you get a better price. Don't know what you want to spend, but just around the corner from Xochimilco is a nice little brick 4 unit. Don't know the price, but consider having 3-4 rent checks coming in. That really helps with the mortgage payment. Another area that I like is the area just north of Hamtramck, along Conant. I tried to buy there a year and a half ago. A 2 BR frame hud home, in good shape, went for 23k. A polish grandma security force could be seen on the porch of each adjoining home. As someone else said, avoid the pricier areas with big homes, as there seem to be a lot of forclosures going on there and tons of half ass flip jobs sitting untouched. |
Track75
Member Username: Track75
Post Number: 2277 Registered: 10-2003 Posted From: 12.75.24.17
| Posted on Wednesday, April 05, 2006 - 9:05 pm: | |
quote:A polish grandma security force could be seen on the porch of each adjoining home.
LOL! I used to see members of this "security brigade" 20 years ago while driving down Clark Street. You gotta love a white-haired grandma out at 7 a.m. everyday in her housecoat, hosing off the sidewalk in front of her house. |
Gildas Member Username: Gildas
Post Number: 533 Registered: 12-2004 Posted From: 69.216.100.1
| Posted on Wednesday, April 05, 2006 - 11:20 pm: | |
Civic pride is a wonderful thing, too bad more around here don't have it. |
Royce Member Username: Royce
Post Number: 1573 Registered: 07-2004 Posted From: 69.209.162.53
| Posted on Wednesday, April 05, 2006 - 11:59 pm: | |
Focusonthed, find another city to invest in if you want to invest in rental homes. Having all of these rental homes in Detroit is one of the reasons for so much dilapidation and abandonment of the neighborhoods. I was shocked to find out that homes are rented out in Rosedale Park. The city should have a moritorium on where houses can be rented out. If you are not investing into an apartment building or two family flat, houses in certain areas of the city should be required to be sold instead of rented out. Too many rental homes have destroyed many Detroit neighborhoods. Focusonthed, stick to apartment buildings or invest in condo developments. Renting homes is not doing Detroit any favors. |
Focusonthed Member Username: Focusonthed
Post Number: 109 Registered: 02-2006 Posted From: 24.192.25.47
| Posted on Thursday, April 06, 2006 - 12:36 am: | |
I appreciate the concern, but renters are not causing Detroit's problems...absentee landlords and BAD RENTERS may be. Like you said, you were shocked to find out people were renting in a nice neighborhood. Has your view of that street suddenly changed now, because of it? Probably not. I'm not getting into the whole rent/own debate, but it doesn't necessarily have anything to do with anything. I probably can't afford your idyllic neighborhoods anyway. (Message edited by focusonthed on April 05, 2006) |
Ddaydave Member Username: Ddaydave
Post Number: 368 Registered: 04-2005 Posted From: 67.149.185.244
| Posted on Thursday, April 06, 2006 - 12:40 am: | |
Focusonthed I fing a huge differernce between a street thats all rentals and one where the occupants own the houses .. |
Gildas Member Username: Gildas
Post Number: 536 Registered: 12-2004 Posted From: 147.240.236.9
| Posted on Thursday, April 06, 2006 - 10:22 am: | |
Focusonthed, Forget what Royce said, you are not interested in becomming a real estate investor to do the city of Detroit any favors. Why have any loyalty to a city that taxes its residents to death and have chased away alomst a million people? Your in it to make money, plane and simple. If a single family residence makes a good investment and will cash flow, then buy it. You'll be providing a home for someone who cannot buy it (or else they would) or is not at a point in thier life where home ownership is a good idea. And god help you if you make a few bucks in the process. Buy property where the investment is sound, that said, Detroit has obscene non-homestead property taxes, annual inspections, with no manual to comply with and is in general a bad place to conduct business, hence the cities current situation. But good deals are out there, buyer beware. Good Luck! |
Jdkeepsmiling Member Username: Jdkeepsmiling
Post Number: 82 Registered: 01-2006 Posted From: 208.50.91.234
| Posted on Thursday, April 06, 2006 - 11:01 am: | |
I would heartily recommend Corktown. This neghborrhood is close to downtown, and is growing and becoming a popular place for younger people to live. There are still some deals to be found, I saw a 32k home on a historic street when I was down there for the St. Patty's day parade. |
Barnesfoto Member Username: Barnesfoto
Post Number: 1870 Registered: 10-2003 Posted From: 216.203.223.84
| Posted on Thursday, April 06, 2006 - 9:27 pm: | |
are you sure that was not 132k? Corktown has gotten a bit pricey. But people want to live there, so you can do well. You can make money here, there are plenty of bad landlords, and more than a few good ones; why not become one of the good ones? Just screen your tenants carefully, as landlords who rent to lowlife tenants often earn the bad will of the neighbors, that's something that you don't want. |
Eastsidedog Member Username: Eastsidedog
Post Number: 172 Registered: 03-2006 Posted From: 12.47.224.7
| Posted on Friday, April 07, 2006 - 2:53 pm: | |
Ddaydave, I would agree that homeowners tend to better maintain their properties, but it's better to have rentals in a neighborhood than abandoned houses (houses that have reached the rock bottom of the food chain and can't be rented anymore because of ZERO demand) or worse vacant lots. Neighborhoods going from predominantly homeowners to rentals to homeowners again is just the cycle of things in big cities. My house was abandoned, became a rental and then my wife and I bought it. You could see it this way, a house is a rental until the neighborhood unslums and someone wants to buy it. There is nothing wrong with being part of that process and making some money at it. For the hardwork of being a landlord there has to be some payoff. So the key is to buy somewhere that is currently unslumming or will go through that process very soon so that you can get some ROI (i.e. any place people are moving to in the city of their own volition). If I were to buy a rental I'd buy a house with as many units as possible (a flat or quad) in either SW detroit or the lower east side between E Grand, Jefferson, Mack and Van Dyke (my neighborhood). Also, north of Hamtramck does sound good too. |
Jsmyers Member Username: Jsmyers
Post Number: 1537 Registered: 12-2003 Posted From: 209.131.7.68
| Posted on Friday, April 07, 2006 - 4:03 pm: | |
I've looked at this thread a bit. Parts of it leave a bad taste in my mouth because of the number of landlords that are either well-intentioned but incompetent or just plan bad-intentioned. This quote caught my eye:
quote:So the key is to buy somewhere that is currently unslumming or will go through that process very soon so that you can get some ROI (i.e. any place people are moving to in the city of their own volition).
I would add that one landlord owning one property is enough to swing an area on the edge in either direction. Even when nothing you can do will stop an area's "upswing," you can do a lot to either slow it down or speed it up. Please be a good landlord. Part of that is knowing when to ask for help and part of it might be putting off making money in order to build something sustainable. |
Eastsidedog Member Username: Eastsidedog
Post Number: 173 Registered: 03-2006 Posted From: 12.47.224.7
| Posted on Friday, April 07, 2006 - 5:23 pm: | |
Jsmyers, very true, many parts of the city hang in the balance and a bad landlord can be a setback. Really, REALLY bad tenants may cause people to move out. Some landlords do real nice jobs on their houses and some do the bare minimum. IMO, landlords who do the absolute minimum hold back the neighborhood a bit or slow it's resurgence because they don't attract as good of tenants because of very low rents. There are also landlords that overdo it and make the houses nicer than they have to be for prospective tenants (our house was fixed up pretty nice, partially why we bought it) which makes it harder to find the right tenant because you want to charge more rent (hence why the previous owner of our house sold it, he had a hard time finding renters for it). It's also important to note that in unslumming neighborhoods you'll find people moving in out of choice AND people choosing to stay because things are getting better. Those IMO are the best places to invest and Detroit has several neighborhoods like this. When I drive through neighborhoods I like to look at the cars people are driving. You can tell a lot by the cars parked on the street. That's Detroit for ya. |
Corktownmark Member Username: Corktownmark
Post Number: 183 Registered: 12-2004 Posted From: 141.217.12.135
| Posted on Friday, April 07, 2006 - 5:57 pm: | |
Besides real-estate there are local publicly owned businesses maybe somewhat smaller then GM that would be investment opportunities in Detroit. Of course there are always commodity products. Like you could corner the market for rutabagas by going to eastern market and buying them all up then selling at a high price when demand could not be met? |