Buddy lost his backside investing in Detroit:(

[HardDrive]

I've got a good friend from college. We go long stretches when we don't talk, but it doesn't matter, were friends for life, you know?

Years ago, when we just got out of college, he tried to get me to invest in some duplexes in Detroit. I said no, and that I thought D-town was a terrible place to invest. Detroit was already a Mad Max hell hole 20 years ago, and it certainly wasn't headed in the right direction. But he bought anyway. I don't know the extent of the investments, but I know he paid $105k for one building in particular. Last night he revealed to me that its worth $17k today. He's poured not only money, but countless amounts of sweat equity into it. The guy has made close to $100k a year for the past 20 years, and he's living in an apartment.

This is the same friend who married a stripper......*sigh*

[jyl]

Diversification. Liquidity. Both are valuable.

[aigel]

Who cares about Detroit - we really want to hear more about his wife.

One thing to look at when buying real-estate is if the area is growing or shrinking in population. That's easily done with census data nowadays on city-data.com or moving company data published periodically in news outlets. Sounds like you had the right intuition even back in the day when this wasn't as simple to come by.

Detroit is probably the worst example, but I do worry too about buying in a place (even to live in myself), if more Uhaul trucks leave full than arrive the other direction.

To JYL's point, let's hope he did a few other investments that were doing better. Real estate is a tough one, as some people have to toss everything they have at an investment property and then have nothing left for other assets. I would not recommend doing that, even if it means you don't hold investment property.

G

[kach22i]

Originally Posted by HardDrive

............duplexes in Detroit.

A client of mine owns some buildings near the old Tiger stadium location. Gated secure parking, nice condos/apartments, dumped some money into them.

He cannot get anyone to live there at the prices he needs to break even, and cannot get out of it without major losses.

Same client ran into similar problems with a motel up north.

Location, location, location?

He owns at least a dozen properties, making things work where others would just run away.

Gotta average your gains and losses, and in the end he's ahead.

[Noah930]

Pics. And not of the duplex.

[Rot 911]

Even 20 years ago, who in their right mind would invest in real estate in Detroit?

[kach22i]

Originally Posted by Rot 911

Even 20 years ago, who in their right mind would invest in real estate in Detroit?

There has been plenty of new development in Detroit in the past 20 years, so much so that architecture firms once located in Birmingham and Ann Arbor moved there to get the business. These "island developments" in a sea of crumbling old city around them might be the exception, but there are always exceptions. Trick is how do you slip in there, make your money and then get out?

[varmint]

the ex's family owns an apartment building in the middle of san francisco. between the taxes and rent control and miscellaneous crap they can barely afford to maintain it. it's not just detroit.

[BE911SC]

My college girlfriend's dad lost a lot of money investing in production of the movie "Ishtar."

[HardDrive]

Originally Posted by Rot 911

Even 20 years ago, who in their right mind would invest in real estate in Detroit?

I'm from the Detroit area. There has always been this idea that a revival was 'just around the corner'. There have always been people trying to get something going in little pockets around the city. My friends property is very close to Wayne State University, a relatively secure area. But the fact is, if you go to a gas station in Detroit, you face the very real possibility of having a gun stuck in your face, and your car stolen, or worse. People don't want to live around that, and they don't care if the housing is free.

Meh. My friends always been a dreamer. Always putting his faith in people and places who are undeserving of his faith.

[Zeke]

Originally Posted by BE911SC

My college girlfriend's dad lost a lot of money investing in production of the movie "Ishtar."

Was it filmed in Detroit?

[R K T]

I wouldn't even want to visit detroit, much less invest in it. It's now a sad chapter in a once great city.

[BE911SC]

The Civil War continues.

[911SauCy]

Chrysler. Imported From Detroit.


BBBAWWAHAHAHAHAAAA

[Gretch]

Rule # 1: do NOT fall in love with the strippers


Rule # 2: Detroit?????????? yer ****ting me, right?

[Bob Kontak]

Originally Posted by HardDrive

Meh. My friends always been a dreamer. Always putting his faith in people and places who are undeserving of his faith.

There are far worse traits a person can have.

[RWebb]

a revival of Detroit is just around the corner

[McLovin]

Real estate prices never go down.

[john70t]

I'd hear the rumor that river-side condos were selling. hot. At least temporarily.

If an outsider young couple or family were to "establish base" in Detwa, they'd need the essential basics:
1). Safe roads or transportation.
2). Easy shopping.
3). Stable employment.
4). Entertainment.
5). Affordable housing and taxes.

(everything posted above not necessarily in that order)

These are the factors that make any city vibrant and desired.....