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(Business Insider)   Apparently spending $4.8 million on 650 foreclosed homes in Detroit is still a better idea than buying shares of Facebook   (businessinsider.com) divider line 13
    More: Obvious, Facebook, Detroit, real estate investor, Your Money, NYSE Composite, municipal governments  
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1648 clicks; posted to Business » on 08 Aug 2012 at 8:15 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-08-08 07:26:51 AM
That's about $7,300 on average per home.

Methinks the guy overpaid.
 
2012-08-08 08:40:01 AM
I think you could make a lot of money in Detroit if you're willing to buy these cheap houses and hold onto them for 10 or 15 years. Upkeep and security to make sure nobody steals the pipes will kill you though. It might make more sense to buy it for the land and sell it to a developer decades from now when the sprawl comes back.
 
2012-08-08 08:59:55 AM

xanadian: That's about $7,300 on average per home.

Methinks the guy overpaid.


FTA:

As far as his future plans, he says he's shooting to make back $2 million by flipping some homes and donating others to needy families.


That's cool. Hell, he could just rent out the houses at a big discount, say, for $500/month. He'll get his investment back in 15 months.
 
2012-08-08 09:15:03 AM
Dear Submittitard, Macomb County is not Detroit. It's a county north of Detroit. Detroit is in Wayne County.

xanadian: That's about $7,300 on average per home.


If it was Detroit, you'd be correct, but since Macomb County has some wealthy communities, he'll come out ahead if he can flip the properties.
 
2012-08-08 09:39:31 AM
That's a lot of homes. I could imagine even only putting in that much money again to do basic repairs and still end up making a tidy return on the investment.

'And' get some write-offs for donating a few to charity.
 
2012-08-08 10:10:26 AM

To The Escape Zeppelin!: I think you could make a lot of money in Detroit if you're willing to buy these cheap houses and hold onto them for 10 or 15 years. Upkeep and security to make sure nobody steals the pipes will kill you though. It might make more sense to buy it for the land and sell it to a developer decades from now when the sprawl comes back.


Personally, I am waiting for Mayor Bing to start parceling out some of the less-populated sections of the city so that they can self-incorporate. It probably won't happen though with the current makeup of the City Council. Then again, I want to know why the city still owns/operates City Airport (er... Coleman A Young Municipal Airport). With the city being in such dire straits as they are, why are they still holding on to that poorly maintained airfield? Sell it and return it to the tax roles!

Back to on topic: as someone else said, these are in Macomb county, not Wayne so not in Detroit proper. Then again, some sections of Warren are pretty run down, so are some places in Fraser. Not exactly a growing mecca, but I think he'll do OK if he can put a good crew together to rehab them. I wonder if Habitat For Humanity could help at all here on his "charity" aspect.
 
2012-08-08 10:15:17 AM

To The Escape Zeppelin!: I think you could make a lot of money in Detroit if you're willing to buy these cheap houses and hold onto them for 10 or 15 years. Upkeep and security to make sure nobody steals the pipes will kill you though. It might make more sense to buy it for the land and sell it to a developer decades from now when the sprawl comes back.


Nope. once you own the home you're on the hook for all the code violations and Detroit will gleefully fine you for all the violations since they need the money. There are certain areas where you can get a deal but you need to plan ahead. Buy one near the downtown. There are a number of business firms down there where young, recent hires are looking to rent in the city so they don't have a long commute, can party in Greektown, etc. So a home in the safer area (some places near Wayne State and its massive medical center are good since you have WSU police supplementing the Detroit ones), purchase it, and convert it into rental units.

I have one unit getting bought up as part of the second bridge project, another unit that might get bought up due to planned WSU expansion, and a few more active rental units. It's more of a hobby though than a business in that it is rare to actually find a house in a good area and not required a lot of money for foundation/structure repair.
 
2012-08-08 10:56:05 AM
Id rather buy land in Detroit than facebook stock. But then again Ive never been a shrewd investor.
 
2012-08-08 10:56:41 AM
There's something wrong with a society that allows people to go homeless and lose their homes, while also allowing this 1%er to buy hundreds of them. This kind of shiat almost makes me support squatting.
 
2012-08-08 11:36:17 AM
I met a girl the other day who was a lawyer and living in downtown Detroit.

She said the rental market there is much higher than you'd expect because no one wants to buy. So even though she has a palatial (by NYC standards) apartment it's still much more expensive than you might think it would be to rent in Detroit.
 
2012-08-08 11:49:15 AM

stiletto_the_wise: There's something wrong with a society that allows people to go homeless and lose their homes, while also allowing this 1%er to buy hundreds of them. This kind of shiat almost makes me support squatting.


This guy is a noted philanthropist and is planning on donating a good amount of the homes purchased to needy families. But by all means continue flame away with zero knowledge of the guys intentions. Many of the properties purchased were commercial in nature and that's where he'll make his money back and then some. They are all in a northern suburb of Detroit where there's more money than people expect.

/met him a few times at his marina, good guy. I've heard Nothing but good anecdotal stories from those who know him
 
2012-08-08 12:03:19 PM

stiletto_the_wise: There's something wrong with a society that allows people to go homeless and lose their homes, while also allowing this 1%er to buy hundreds of them. This kind of shiat almost makes me support squatting.


I'll cut him some slack until we see what he actually does. Selling to low-capital individual flippers or wannabe landlords won't help (it's a big part of what crashed real estate), and not every landlord with money is a sociopathic greedhead slumlord. If he's willing to put in the cash for upkeep, and is both willing and well enough capitalized to get by with a relatively low margin, he and others like him could do an awful lot of good for the Detroit area.

I'm convinced that Detroit is going to be an amazing place in 30 years; a mix of classic and new with completely new ideas in urban planning on display, and just a dim memory of the bad days. Yeah, that's almost entirely wishful thinking, but it really could happen - the raw resources of Detroit, both civil and human, could end up creating anything given the chance. Guys like this could possibly help give them the chance.
 
2012-08-08 01:48:24 PM
Macomb county is not Detroit. It's in the tricounty, but not in Detroit.
 
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