US Detroit

For those of you thinking of buying in Detroit or other areas of the USA....check out some of these shenanigans

- Evictions, flipping tarnish effort to turn squatters into homeowners

 

Being a resident in th US, what's your take on Detroit and the perceived turnaround and gentrification of the area?

I mean if there was a large capital city in Oz with houses available for $50K, they would quadruple within 4 weeks.

 

Wow....you read that article and think its a good place to get invested into.....

 

I wasn't implying that it was or wasn't, I was really seeking your unbiased view as a local bc of all the hype on this site.

 

Yep....lots of Hype.

There are some people making money for sure, but like I posted on the other thread don't confuse Australian property stability for the USA property market.

I know when I've dug into the figures owning property here in the USA is no where near as profitable as it first appears with much higher property taxes (/compared to Australian council taxes) that are often glossed over.

If you want to invest in fast moving trades......go buy $NFLX , $AMZN , $SYK shares etc

I could totally be wrong, but unless you are here on the ground I think USA is a place you can easily get burned on property/but its the place to invest in equities for sure (eg easy to get burned on equities in Australia as too small a market with too many insiders hyping stock positions).

 

Just a thought if you want to follow a real Detroit local - follow Jerry Paffendorf on FB as he's been posting a lot of whats really going on in Detroit with his Loveland software.

- Jerry Paffendorf

 

BTW talking about relocations etc, randomly came across this today 1000 staff moving from NYC to Nashville
- An old Wall Street money manager with $500 billion is moving to Nashville from Manhattan to save money

In case you think Nashville is a hole....yeh its mainly a country and western version of surfers paradise......but the Franklin / Belle Meade area just south west of town....is gorgeous and I think if my wife got her hands on one of those houses......she'd quit NY in a flash.

 

There are I think 50 States in US

That's like asking someone from Sydney to advice on market conditions in Darwin, who has never visited, yet alone invested in that State. No offence intended, just saying

Forums like BiggerPockets where you may find investors who have been in this market may be a good starting point.

 

Hi

USA is a huge market and you have to do your homework. I have bene doing business in Florida, and Georgia for some time and these have been fantastic markets. Many clients have at least doubled their money - plus more when you factor in rent and currency.

You do need to check on things like county and state taxes as well as of course location and property management.

In Florida there are still yields up to 15%. Much lower costs to buy and hold than in Australia. Alabama is also good - properties start rd $85K and gross yields round 10%. Many states have no land tax or here is no huge stamp duty fee.

Here is a real example - 3 bed condos in Orlando, FL - bought for rd $30K rd 2010 now selling $130-$140K. Rents rd $1000 per month gross. Try doing that in Australia.

Prices have gone up a lot in USA since 2010 but there are still bargains under $100K.

Steve

 

No doubt Steve, US has some amazing markets, all the investors I know from PC have made a killing.

Another little snippet ... and sadly we don't have in Australia... I just offloaded a property and will be using 1031 form, this means I don't pay any capital gains tax. I can use these funds to buy another investment property, no CGT.

Government allows investors to keep all their profits, rinse and repeat. Another good strategy, take some money off the table and move onto other markets that are seeing more upside.

Now lets look at what is happening in Atlanta... would you believe I have some Aussies comparing Atlanta to Regional towns in Oz. ..... just saying.
I think they are assuming because we are buying at such a lower entry means its a one horse town. What they don't realise is there are suburbs like Buckhead in GA where you will pay millions, but it wont be cash flow positive....

Film industry alone in Atlanta generated 9.5 Billion

Deal: Film industry generates $9.5 billion for Georgia’s economy | Governor Nathan Deal Office of the Governor

 

You mean you "deferred" capital gains....you still have to pay it, you just have to pay it later

 

It works well for me

 

Agree, 1031 Exchange is one of the things that the USA does well.

That and pre-tax 401k (or giving you the choice of post tax ROTH).

But just to be clear.....delayed isn't "no cgt"

 

I thought this was a good read .... the upside and the downside for those interested in this market
The Verdict on Detroit—Is it a Good or Bad Market for Investing?

Watch this, what not to buy
Number 1 mistake buying in bad neighbourhoods

 

The gunshots i heard just under 1 minute into the video don't conger up lifestyle drivers for capital growth ! LOL

 

Ford to remake Detroit's most famous ruin

Ford to remake Detroit's most famous ruin

 

Detroit holiday: Inside world’s most surprising music hotspot

 

Followup post as came across this article
- Wayne County Tax Auction: Why the treasurer should stop holding it

like I said....wouldn't touch it with a barge pole but YMMV.

 

Has anyone been seeing the lastest news cycle?

Detroit public schools' drinking water shut down amid lead fears

US cities that have become ‘third world’

 

Please don't let me tell you I told you so...…… Making money in real estate is all about timing the market...………………..

Why Detroit is a Good Place to Invest

1. Bankruptcy really helped city start over
2. Since the current mayor (Michael Duggan) was elected, Detroit has had a major turnaround
3. Demolished 3-5,000 houses per year
4. The city has attracted lots of new businesses downtown
5. Purchased $20 billion of real estate
6. 2016, 100,000 new jobs created
7. Pistons basketball team brought downtown
8. Last few markets in the country where you can still buy inexpensive real estate
9. $40-50,000 properties renting for $850
10. Nowhere near the peak
11. In suburbs of Detroit, home values are back to where they were in 2005-2006
12. Can still get homes at $70,000 that will appraise at $100,000
13. The city of Detroit has targeted 15-20 different parts of the city where they want to go in and clean-up and improve property values. Here are a few links to articles referencing some of the areas the city is targeting:
    1. Detroit’s Expanded Plan to Spread the Wealth to Neighborhoods
    2. Develop Detroit plans 70 new, renovated homes in North End, Grandmont Rosedale neighborhoods
    3. Fitzgerald neighborhood's $4 million-plus project to be led by The Platform, Century Partners
14. Schools are improving
15. Downtown is definitely happening, especially for upscale millennials