The following paragraphs and news clips detail more reasons why the City of Detroit is a viable bet for investors in the current economic climate.
Whilst Western New York will remain our 'bread and butter' which has seen to reap rewards for our clients for years now and will continue to do so, Detroit has a huge potential at the lowest prices seen in the USA today.
"When recession strikes, investors lick their lips with anticipation" (qoute from DPI CEO)
CNN Money.com report dated June 12th 2009.
As Detroit home prices crash, sales are hotting up! But with all the plant closures and layoffs, who's buying? INVESTORS- some of whom are snapping up 5-10 properties at a time. The investors buying span the globe and competition for the best properties is extremely high. Recently a Californian purchased 178 properties, one at a time all for under $10k. ( DPI do NOT advocate the buying of property UNDER $10K, for reasons explained on our Detroit 'uncovered' page)
House prices have risen 23% compared with this time last year (2008).
USA Today reported at the beginning of this year that crime figures in the Metro Detroit region dropped significantly in 2008. It has the lowest number of homicides in 40 years, 14% down on the previous years figures, due mainly to the Detroit Police arresting suspects responsible for more than one murder, and crime reducing strategies such as collaberative task forces, shifting the hours that some offiecrs work to provide a higher number of policing presence and targetting the worst hit areas of the City. Detroit Mayor Cockrel described this news as 'encouraging' and went on to say......" My sense of things is that overall it looks like we may also see reductions in other areas. Our goal is to try and keep that up"
A house costs less than a car in Detroit- Washington Times 2007.
Detroit made its fortune on the back of the car industry, which has been depleted causing mass unemployment and forecosures and ironically house prices are lower than a car. Up to 1.5 million americans could lose their homes in the next two years as repossessions rose by 43% in 2006. The vast majority of those at risk are borrowers hit by the sharply rising costs of "subprime" mortgages offered to low income buyers, often with bad credit ratings. Lenders typically offered loans at attractive 'teaser' interest rates which after two years leaps, doubling repayments for many.
. "A Detroit property being bought by DPI Ltd and processed by our team there"
What Investors should know... June 2009, (written by a leading realtor/economist/journalist in Detroit)
Pent up buyer demand is "enormous", according to a leading real estate expert in Michigan. Buyers have been sitting on the sidelines, waiting for the market to hit rock bottom: HOWEVER, those who try to time the market perfectly may miss the turnaround point.
"Even if we havent hit the absolute rock bottom yet, the worst case scenario is that we look like we're darn close to it! Its MUCH better to get in now than wait for the true rock bottom to hit, because I believe that prices will bounce up quickly"
Although property prices many not return to pre cash price levels for another 5-10 years, a "STABILISATION SPIKE" will see prices jump up 15% or more!"
Detroit's rental market has become increasingly active, as demand can be attributed to the influx of people who have lost their homes to foreclosure, or relocated to the area but may not know where they want to live, and individuals who do not have adeqaute credit to qualify for mortgages in today's tight lending environment.
THIS IS A MARKET TO BUY AND HOLD ONTO THE PROPERTY. Investors who may wish to avoid the Inner City problems might consider undervalued property in the relative safety of the surrounding neighbourhoods and suburbs, as most of the suburbs are great areas to live, work, play and own an investment property, as DPI can confirm during our recent trip there.
CLINT EASTWOOD said recently after filming his latest movie "Gran Torino" MICHIGAN will be the next film capital of the world, as the movie was shot in Detroit. The State's generous tax incentives for film production have spurred a boost in jobs in a year that's seen declines in many other industries.
More diversity in business has been welcomed in Detroit, from new technology such as web access to several large Media projects and the City has seen a rise in new company formation offering a variety of business goods ranging from beauty products to urban agriculture. Hundreds of independent recording studios remain and thrive throughout the City, young people are recording their own music, with the heavy presence of Motown in recent decades proving the inspiration.
Commercial shipping is a large industry in Detroit and it has a major role in the international market. Bordered with Windsor and Ontario, Canada, more foreign trade passes throguh the port than any other in the United States. The port of Detroit has direct access to world markets via the Great Lakes/St Lawrence seaway. A DETROIT DOCK project is receiving $7m from a Federal Stimulus package to support the design and construction of an offshore wharf in the Detroit River. It will also provide additional space for a passenger terminal that will supprt the current ferry service. Building has already begun!
The Detroit labour force has an agricultural labour force of 2.05 Million comprising of....Construction and mining, manufacturing, trade, transportation and utilities, information services, financial activities, professional and business services, education and health services, leisure and hospitality services, other services, and government service jobs.
POPULAR MISCONCEPTIONS AND COMMON MYTHS OF INVESTING IN DETROIT REAL ESTATE..
Finally, let me give you some guidance about investing in Detroit, in the form of common myths and misconceptions, all probably borne out of slumlords who work in bad areas of the City, in properties that they leave to rack and ruin showing no remorse for the terrible conditions in which the downtrodden tenants have to live...
Misconception #1 -Detroit is a Ghetto.
Common preceptions of Detroit from people who have never been there is that the entire City is a Ghetto! NOT SO, there are MANY excellent areas, suburbs and neighbourhoods if you know where to look! We saw beautiful brick houses in great neighbourhoods where the local populous care where they live. Houses are kept up, lawns are maintained, most families own their house, many are college educated, and many earn more than $40k a year. Does that sound like a ghetto? There are bad areas as in ANY major City in the World, London and Paris being no exception.
Misconception #2-Detroit is Crime Ridden and any house I invest in will never be safe
Security is a big concern in ANY major City, and Detroit is no exception. It is however, not a war zone where you have to dodge bullets and everyone has a rap sheet longer than their arm! The areas that DPI will be sourcing properties have citizens who are as adverse to crime as you and I are and dont want to live in a crime ridden area. There have been great strides taken in reducing crime and its working as detailed above! Thare are unsafe areas as in any major City, and it all comes down our professional team of realty experts. Say No More!
Misconception #3- The hosues are cheap but you can never get them rented or they require too much repair/updates
The rental market in Detroit is stronger than ever and rents are steady, and in our opinion, relatively high. What happens when more people get foreclosed and cant get a new mortgage for another house and less people qualify for mortgages, and less people are buying a new home because of the uncertainty of the overall economy and high umemployment means that job prospects are low? The answer is that there are MORE renters!!! What that obviously means for investors is more tenanted properties and heightened cash flow, as many tenants (who will always be screened) are on state benefits which guarantees payment each and every month. Also, as people move from declining areas of the City, to better areas like those that we will be concentrating on, there becomes even more demand from renters!
As explained, we will ONLY source properties at prices at $10k and above, and these will have been researched, viewed, photographed, surveyed and appraised to ensure that nothing is left to chance. Expect to add $2k to the overall budget to get any vacant properties up to rentable standard. Buying properties UNDER $10K to as low as $1500 as seen on the web will dramatically increase the repairs needed, in most cases more money will be spent on repair than the price of the house in the first place, and generally these properties at the lower prices will tend to be in run down areas that will always attract crime.
DETROIT HAS EXCELLENT POTENTIAL BUT ONLY IF YOU SHUT THE TRAPDOORS AND CLIMB OVER THE OBSTACLES PRESENT THERE. DPI HAVE A FULL PROFESSIONAL REALTY TEAM MIRRORED ON OUR SYSTEM IN WESTERN NEW YORK, AND AS IN BUFFALO AND ROCHESTER, CLIENTS WILL RECEIVE A FIRST CLASS SERVICE FROM RESERVATION TO CLOSURE AND INTO MANAGEMENT TO PROVIDE THE VERY BEST PROPERTY DEALS ON THE PLANET.
We have achieved incredible success so far in Detroit, so if you are interested in receiving the latest property deals, email martin.b@dollarpropertyinvestment.co.uk for more details and take advantage of low cost property with huge Rental Yields!!
McArthur Bridge MGM Grand Hotel 
Brick Bulit Bank Foreclosure in Detroit Suburb- SOLD!