Why not snap up land in Detroit?
 

Watching Grand Tour, I got to thinking about real estate in Detroit again. I looked on Zillow and there are hundreds of lots for sale for under $3K, and for as little as $200. So why not buy, say, 10 empty lots for less than $30K? They have to be worth more in 10 years, right? I wouldn't buy houses: too much liability.

So much for: location, location, location. I just don’t see Detroit “coming back” anytime soon. There are suburbs around D that are nice but I’d stay away from the city. Those prices you are quoting have been that way for at least the last 10 years, or more. I know as Ive had a business in suburb of Westland for the last 15 years.

Talked to an acquaintance last night who moved to Pittsburgh and is snapping-up RE. Told me some crazy stories about cheap properties. He's a real hustler and told me 2 or 3 years ago that Detroit was "over." As in, it was a hot opportunity for buying in but the ship sailed.

YMMV.

What would be the point of buying up land there, if it won't appreciate? IIRC, some of those sub $5,000 lots have significant back-taxes due.

South of the Renaissance center in downtown Detroit is what remains of the 1967 riots that burned out multiple blocks of businesses, and residences, which is still a downtrodden area to this day. 52 years hasn't changed this.

If there was a decent probability of flipping Detroit real estate none of it would be so cheap right now.

Detroit is surrounded by normal middle class affluence right up to filthy rich old money. I’m pretty sure lots of people have thought about snapping up the RE but guess what, nobody’s doing it.

Well hardly nobody. There are places with a pretty good prognosis but you really, really have to know what you’re buying and where. That kind of knowledge comes only from having lived there for a couple generations.

Some speculators will get rich because they’re lucky or already rich. I’ve heard so many different ideas about taking advantage of Detroit RE but I don’t see much happening, considering how big the area is.

I'm from Detroit. It's personal. I want to support Detroit. And I have stayed out.

There is no reason to live in Detroit, MI. The weather is horrible. The city is huge, and unmanageable.

I was in Detroit during the 67 riot...saw the city burning..and charred as I left.

^^^This...maybe if the weather was better, but Southern Michigan/Northern Ohio has dismal weather for 4-5 months over the Winter, and Detroit still stinks like an oil refinery the rest of the year with lots of urban decay, and bad attitudes.

It's cheap and it's cheap for a reason. I wouldn't even consider it.

Growing up on the border of Detroit and living in SE Michigan most of my life it is hard for me to detach prior experiences and emotions.

However, you know who doesn't have such luggage?

Those so-call millennials, specifically the ones that grew up bored to death in the suburbs and want a little action and fun as adults, they see the city, any city - even Detroit as a playground.

The enormous amount of growth in the city of Detroit in recent years, corporate business, bars, restaurants, shopping, and multi-family housing has all been spurred by these millennials looking for a new experience.

Huge question remains, will they remain if and when they start families?

Public schools are I am told horrible, private schools are great and also greatly expensive. I did a little project on one of these private schools a little while back, the builder that got me in the door told me how much his brother spends there, I could not believe it.

Some references below citing similar information.

September 23, 2018
Opportunity abounds in Detroit — if you know where to invest
https://www.crainsdetroit.com/other-voices/opportunity-abounds-detroit-if-you-know-where-invest
December 28, 2018
Detroit's Big Comeback: Out Of Bankruptcy, A Rebirth
https://www.npr.org/2018/12/28/680629749/out-of-bankruptcy-detroit-reaches-financial-milestone
May 2017
The Verdict on Detroit—Is it a Good or Bad Market for Investing?
https://www.biggerpockets.com/renewsblog/detroit-real-estate-market/
I've talked to several potential clients on building multi-family in Detroit, so far it's just been talk.

I posted this several times before; as taught in grad school light frame construction (stick built) has an expected lifespan of 50-75 years (yes you can double that if you really take care of it well). When you go brick on block 100 years, steel frame with brick and block and taking it to university level quality construction up to 200 years.

Many of the old brick house in Detroit are actually brick veneer over wood frame, so consider them at the upper end of the 50-75 year range. And of course redo the brick joints (tuck-point) every 25 years, redo the electrical, mechanical and plumbing that all have shorter lifespans than the shell and most of the housing in Detroit is past it's go bad date.

Why this is so traumatic for Detroit is it was so rich and affluent in it's heyday that much of the city is single family or duplex, or even 4-faimly dwelling of stick built construction. Compare to Chicago, Pittsburgh or wherever in the Rust Belt and they have a much higher ratio of larger sized apartment buildings made of brick, block and steel - they last longer, and they had something to rebuild from. For some reason rebuilding cities happens quicker than building from scratch.

To get an image in your mind, there are many parts of Detroit where a single, a few or a row of triple brick wythe or brick on block buildings (old business, party stores....etc) are on the main road or just at the corners, but back in the neighborhood the houses are gone, taken by time and neglect.

In my opinion, Detroit as a viable city in the sense of it being balanced and family friendly is a long way off.

Detroit as an investment opportunity for commercial buildings, mixed-use buildings and multi-family especially, is phenomenal.

This rebuilding is all happening in clusters and spots, and I do not have a map of the future, but apparently some do and are making the most of it while they can.

EDIT:
Someone mentioned the weather sucking in Detroit, it sucked worse in the Sunbelt than the Rustbelt before air condition became common and affordable, so it's kind of relative to your situation. Coal to electricity.

Other changes include going from freight trains to trucks, from freight waterways to airports, and the near collapse of many heavy industries by oversea competition.

so did you use matches or a zippo?

I just watched this movie. It’s worth a look.

Wiki:

‘Detroit’ is a 2017 American period crime drama film directed by Kathryn Bigelow and written by Mark Boal. Based on The Algiers Motel Incident during Detroit's 1967 12th Street Riot, the film's release commemorated the 50th anniversary of the event.[6] The film stars John Boyega, Will Poulter, Algee Smith, Jacob Latimore, Jason Mitchell, Hannah Murray, Kaitlyn Dever, Jack Reynor, Ben O'Toole, Nathan Davis Jr., Peyton Alex Smith, Malcolm David Kelley, Joseph David-Jones, with John Krasinski and Anthony Mackie.

Haven't any of you ever heard the song? The weather is bad there.

<iframe width="560" height="315" src="https://www.youtube.com/embed/aktLRiWXfqg" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
The music is not much better

If you want a different perspective watch the second season of "Dope", episode 3 on Netflix. Without getting political , one can make an argument for a wall in the Detroit river.

I have been to Detroit a few times urban exploring. There are some areas that are changing for the better, there are others that will never change. I expect more change when the Hamtramick plant closes.

I don't think back taxes would be a big issue. Any City owned property ( even if taken by tax sale) wouldn't be subject to back taxes. And any property legitimately for sale wouldn't have more than two years back taxes. I wouldn't be surprised based on Detroit's finical situation if they didn't have accelerated tax sales which would mean back taxes would be even less.

That being said. Even if you could buy lots cheap no tax issues. What are you going to do with it, other than pay taxes? Certainly you are not going to invest and I am sure no bank would lend to try and develop the lots. Unless of course they were water front or some sort of fringe neighborhood near a desirable or upcoming area. But then active investors are already onto those deals.

One of the problems old cities have is the utility infrastructure.

It's just so old that it needs replacing, water mains fracture in a cold spell, power grids easily strained in a heat wave.

Heck, here in Ann Arbor our city council-person was explaining that part of the reason for one of the roads being closed for so long was every time the contractor tried to tie the new line in, the old line would fail at that juncture.

They had to keep replacing line until a solid connection could be obtained.

There is the city above ground, and the city underground.

Very sad to see a once great and bustling city just a mere shadow of its former self.

The only way for Detroit to recover will be to attract employers with some significant incentives for both running a business and then families to move.

The weather will be a deterrent for sure and the feeling of safety is a must. I always say you can move to anywhere in the world but can only call it "home" if you feel safe.

I watched that movie about a year ago. I liked it. As noted the movie is based on a real event. Don't want to give it away incase someone wants to watch it. But frightening for sure to think this happened. I did some fact checking the events at the Algiers are more or less accurate.