12 votes

Investing in Detroit

It's almost that time of year! The time when the government returns my currency back to me. In years past I have used this to chunk away at student loan debt, fix my car, and buy silver and gold.

Now that I have all loans paid off, my car tuned up, and little stack of silver and gold I am looking to diversify (into something real and tangible. Sorry, no bitcoins for me). I would love to buy real estate where I live, but it would take decades to save at my current wage at current house prices.

I was curious a few days ago and looked at Detroit real estate prices. They are extremely cheap. You can find lots for less than $1,000. There are houses for much cheaper, but since I don't live in Detroit and wouldn't be there to maintain (or protect) it I figured purchasing a lot would be a better choice for me.

While I'm researching, I figured I'd ask the DP community what they thought of this. Thank you in advance!

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I think it's a good idea, BUT

I live in Detroit, and it has certainly been improving incredibly fast. It's a great place for creative, young, free-minded people to live and work. There are so many great opportunities for entrepreneurs and artists.

That said, I believe it is wrong, and anti-libertarian to purchase property and allow it to sit idle for an extended period of time -- even if the law permits it. If you are not going to be mixing your labor with the property, then you should have no ownership claim over it. It's also not fair to the people who live near these plots of land that sit vacant while someone in a distant location waits to profit.

By all means, by some land and do something with it. Plant crops on it, build a house and sell it, etc. Move to the city. I'm always glad to see more freedom-loving people moving to Detroit. But please don't exploit the people of Detroit anymore than the politicians already have. I wish you well.

depends if you can afford the yearly lot taxes.

this is the only problem when you sit on vacant lots.

Let Go

Sad to see Detroit let go to this level.

Who's Closing or Laying off?

http://www.dailyjobcuts.com
.

Cautions

China is stepping up its investment in Detroit
http://www.csmonitor.com/USA/2013/1225/Why-China-is-stepping...

Detroit is sort of a blank slate with an existing infrastructure. There is some revival downtown and in the Wayne State University "new town"center. Arabs have stabilized the dearborn area. Mexicans are turning around their neighborhood in SW Detroit. I like Old English village and some places along the Detroit River between Belle Isle and Grosse Pointe. Detroit, bankrupt as it is, might have a libertarian future if gated sub-cities were allowed with their own security and private schools.

A word of caution though. You might not comprehend the violent crime rate. If you want to prevent things from walking away, you better have good locks and be present. The public schools and other public services are third world. Hence the blank slate concept. Still, if you and some others can figure out how to set up Fort Apache in the ghetto, there is opportunity as the Chinese have noticed.

"Gay dudes talking about transmissions and clutch plates and gear ratios and drinking warm vodka from plastic cups. That's Detroit." -Charlie LeDuff

imo

Wait until the dust settles.

Who knows what will happen when the courts settle this. Perhaps the water will be cut off ;)

donvino

Bought 1 house and 4 lots last year.

Last year I bought in Detroit, one lote for each of my children and one for my wife and myself in the 48214 area code close to Belle Isle and the river. Islandview is very good as is east english village english village and Indian village http://www.eastenglishvillage.org. Indian village is one of the neighborhood in this area and is very nice. One of the residents of Indian village is recently purchased 1500 lotes in this same area, the operation is called Hantz farms. http://www.hantzfarmsdetroit.com
I would suggest looking into city owned properties and getting multiple lotes close together. Buy low.
grant

As always its location, location with real estate

Detroit could well be an excellent long term investment, however it may get worse before it gets better. I have a friend who is investing in homes in inner city Grand Rapids, what he is looking for are larger, older homes with 4+ bedrooms near the colleges and setting them up as medical student rentals. The city and the Amway corp have invested heavily in state of the art medical facilities, several colleges have campuses there and they need housing. His MO is to rehab the homes and have an 12 mo lease, collect the annual rent up front from the student loans. So the cash flow is excellent.

Location

One of the areas I was hoping someone in the community can help steer more towards. I have some ideas but would love to hear some new ones.

I don't see Detroit completely disappearing. It is in a great geographic location. But yes, I am looking at this to be long term investment (10+ years).

Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety
-Benjamin Franklin

From a prepper perspective it's horrible

Water limits escape options and you have a concentrated urban population to deal with. Location, location, location: kill zone, kill zone, kill zone.

There is nothing strange about having a bar of soap in your right pocket, it's just what's happening.

Break up Detroit into smaller cities.

Of course it probably won't disappear, but it could break up into smaller cities. Detroit up until the 1920's was limited to pretty much the downtown area and riverfront. I would like it to return to such limits.
grant

Interesting...

I would love to be able to buy close to the river (lower east side near Hantz Farms seems to be ideal). You seem to know a lot about the area...

I have spread my search to surrounding zip codes. I have found a couple in 48215 and 48213. Any thoughts on this part of the city?

Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety
-Benjamin Franklin

Those are rougher areas, but

Those are rougher areas, but of the two 48215 is probably a better area. I would suggest staying closer to the river, although the 48215 may be a area that some blocks have flooding problems. I've posted to some of your other comments where you may find some helpful sites or if you want you can email me.
grant

We did a working group on the subject a while back

There are some people there "doing it" but it's a tough proposition. These properties are often severely damaged and mold issues are just about everywhere. Also look out for asbestos. Now you have to rennovate these structures to bring them up to current code and that's another set of problems. There's a lot of codes and they make up new ones when they want too.

The cops are just another gang you will be dealing with. Crime rates aren't relevant anymore, crime is a way of life and survival skill for residents.

It's a lousy place for self defense. You are jumping through all kinds of hoops to keep your defensive weapons. To legally comply means they know exactly what you have and where it is.

More recently we heard of newly created "compliance units" which go around the remaining businesses looking for any and all violations of whatever rules and codes (they have a lot of them) to hustle up cash (and keep their jobs).

In other words, the people in charge don't care about fixing it and wouldn't know how to if they did. All they care about is owning it and sucking every last drop of life left out of it. There's people doing urban farming and it might be tolerated in the future and it might not.

Overseas buyers, particularly Chinese have been scooping up properties so there's money in flipping them.

There is nothing strange about having a bar of soap in your right pocket, it's just what's happening.

These are some of the reasons

why I am considering purchasing a vacant lot, not a house.

Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety
-Benjamin Franklin

the problem with vacant lots

Is that they don't produce any cash flow and you will have to pay taxes every year. Unsupervised an empty lot will soon build up with trash and who knows, maybe even someones toxic waste dump. Building debris, lead based paint, asbestos, and the next thing you will get is a letter from the city to remove it, if it's toxic, that is VERY EXPENSIVE to get rid of. Happened to us back in the day, we had a four unit and the backdoor neighbors dumped all their trash behind the garage for an entire winter, they just flung it over a chain link fence. The ironic thing is the people who dumped the trash were the same ones who called the city on us! We found mail in the trash with their addresses on it. The city inspector wouldn't listen, he said it's on your property, you remove it, AND YOU REMOVE IT NOW!

taxes

I know Rand Paul has an economic plan for Detroit and other areas of high unemployment. Maybe that would reduce/eliminate the property tax burden??

Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety
-Benjamin Franklin

Research sites.

Here are some sites I used when doing research. Zoning is a good thing to check into.
http://www.detroitmi.gov/Portals/0/docs/Legislative/cpc/zoni...
http://www.detroitmi.gov/CityCouncil/CouncilDivisions/CityPl...
http://www.detroitmi.gov/Default.aspx?tabid=3093
https://is.bsasoftware.com/bsa.is/AssessingServices/ServiceA...
http://www.michigan.gov/landbank
Go into the michigan land bank and under the area code 48214 you will find a large list. I would suggest sticking to addresses of 3000 and below. They are closer to the river. There are some on Maxwell that are very nice, Parker and Fischer. Let me know if you find anything and need any advice.
grant

Awesome!

You're the best. Appreciate the help.

Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety
-Benjamin Franklin

Wow that sucks!

Gotta love freeloading neighbors who won't hesitate to call the cops on you!

That's something I'll have to consider. I was thinking of planting some trees and going up a few times a year to do some cleaning/yard work. I currently live about 2.5 hrs away, so I wouldn't be able to do those things very often.

Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety
-Benjamin Franklin

I think for a real estate investment in Detroit to work

you should get 50 to 100 DPr's to go in on a multi-block purchase so you could all watch each others back, and gardens.

"It is difficult to free fools from the chains they revere".
--Voltaire

It's hard not to be a menace to society when half the population is happy on their knees. - unknown

That would be sweet!

Have you heard of Hantz Farms? One of the many cool ideas happening in Detroit.
http://www.hantzfarmsdetroit.com/

Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety
-Benjamin Franklin

That was really good, thanks Hector

I sell a novelty product (www.getyourmillionshere.com) and one day I get a call from two dudes wanting to buy my Bills and I asked them what they do up there in Detroit for work. And the one guy talking said, we mostly grow weed in the abandoned lots, and keep an eye on things. Growers, of any kind, you gotta love them!

"It is difficult to free fools from the chains they revere".
--Voltaire

It's hard not to be a menace to society when half the population is happy on their knees. - unknown

I have been thinking the same thing...

Just getting a lot is a great idea. YIt could be a great investment if you get it for that cheap and detroit recovers... I am also interested to hear what other people on dp have to say..

BUMP for discussion

"When the people fear the government, there is tyranny. When the government fears the people, there is liberty."

-Thomas Jefferson