Detroit, Michigan. This city was once the shining example of a vibrant and prosperous city. It had one of the strongest middle classes in the world and a population of over 1.8 million people. Today there are about 700,000 people with thousands of homes abandoned. And that is why I took a real estate trip to Detroit.
Many of you know that I am a family man, entrepreneur and I am an investor. My definition of entrepreneur is fixing problems for profit. And, honestly, the problem that Detroit has now is a good one to have.
You see, Detroit went into a big decline with high unemployment and high crime. This led to people fleeing the city for better hunting grounds. The thieves began to leave also. Without anyone to rob, they had to move on. And, in recent times, the City of Detroit has actually began to take action to help the city rise again.
Unemployment is on its way down. In 2014, the unemployment rate was over 22%! And, as of this writing, according to Y Charts, the unemployment rate is 9.4%. This is still higher than the national average at 4.2%, according to the Bureau of Labor Statistics. However, it is still a dramatic drop from 2014.
With unemployment dropping, that means more people are working and more money is flowing throughout the city. This has also caused more business to return to the area, which in turn, lowers unemployment more. And, the city is working to tear down blighted houses and sell abandoned or delinquent houses to investors, rehabbers, contractors, flippers and developers. With the houses being purchased, fixed and rented, this causes property values to raise attracting more real estate purchases.
Right now, Detroit is a hot spot of opportunity. Over 6000 houses were sold by the city, many of them at bargain prices. I am the Managing Partner of a real estate investment company called Barfield Properties LLC. And we own multiple properties in the Motor City. Each time we bought a house, it was rehabbed within a month and rented within 2 months. So, the purpose of my trip was to visit and put my “boots on the ground” to personally visit and analyze the properties we own as well as the neighborhoods they are in and explore other up and coming neighborhoods with potential properties.
I spent a whirlwind weekend driving from one side of Detroit to the other and back. It was strange. I went by the previous home of the founder of Mowtown Records, Berry Gordy. It was mansion style and on a street lined with similar houses. But, if you drove a few blocks in any direction, you began to get into distressed neighborhoods. I saw this time and again all over the city.
The trip was a fantastically fruitful one. I have a fantastic team there that identifies the properties, manages the rehab crews, rents the properties and manages them. There is still good opportunity to be had there at bargain prices for about 3 to 4 more years. Detroit is on the rebound and it is great to be part of the solution.
So, if you are looking to get distressed houses, rehab them and either rent or flip them, want to find a turnkey rental or you intend on creating a development (I saw a 6 acre parcel in the city that could handle residential or commercial development), then I suggest you check out Detroit. Tell them Daddy Nomad sent ya. Safe Travels.
