Like the city he calls home, Brent Maxwell was hit hard a decade ago when the economy crashed. And just like his city, his grit, will and determination allowed him to survive and rebuild. Today, Brent is the Managing Director of IPS Realty, where he helps others invest in Detroit’s booming neighborhoods, mainly on the East Side. He constantly monitors Detroit real estate, allowing him to identify the edge of hip areas and ride the wave. On this episode, he shares more about his experience, the city of Detroit and his best tips to find emerging areas.
Key Market Insights
Transition is happening in the areas beyond Detroit’s central business district
There was a talent exodus in 2008, but now people are moving back or investing in Detroit
Outside of Michigan Ave, saw gentrification and West Village on the East Side has experienced dramatic growth
Had amassed $1MM portfolio on paper in 2007
Avoided bankruptcy and decided to pay back debt on a monthly plan
Started grinding, wholesaling and finding deals for other investors
Not focused on the hottest areas, looking at the edge of hip and looking to ride the wave
To find the path of progress, IPS looks at comps and data combined with the art of being apart of the neighborhoods, on the east side
Most investors prefer the West Side, but he likes the East Side
Areas in the primary parts of the city are at 110% of 2005 peak values
Looking for values that are starting to percolate and seeing a curve with days on market, per sq. foot costs, per door price
Banks start taking interest in neighborhoods when homes begin to sale at $50k per door – allowing them to sell to homeowners
For an investor, the difference between $100k house and $80k house is $20k, but for a homeowner it’s $110 per month
Interest rates will go up and impact the market and may drive buyers who were looking at nice neighborhoods, may now look at adjacent neighborhoods such as Jefferson Mack
With Tigers, Red Wings, Pistons, and Lions all downtown, there is a 50/50 chance for a sporting event any day in Detroit
Detroit used to have 2 million people, now has just under 700,000
City has a 50 year plan for the land in Detroit and the market is shifted in influence by what the city wants to happen – think tax incentives
Sit and watch for an hour to understand the property and block
Many investors are savvy, but can get blinded by the numbers and projected returns on paper
Multifamily has a mitigation against theft as there are still people living in an occupied house
Prefer single family in B and B-minus areas
D area is war zone and lots of blight, C has a few vacancies, but most have care, B are older houses, more frame, less brick, lots of renters, A is all homeowners, upper middle class
Bull’s Eye Tips:
Winning Your Market: Buy and Hold
Tracking Market Changes: Check the market everyday
Daily Habit: Check comps daily
Resources:
Ep. 14: Detroit’s Ruin and Renaissance with Jeremy Burgess
Best Business Books:
Tools for Titans by Tim Ferris
Digital Resources
MLS
LoopNet
AppFolio
Google Drive
Dropbox
Hubspot
Tweet This:
“Bloom where you’re planted”
“For an investor, the difference between $100k house and $80k house is $20k, but for a homeowner it’s $110 per month”
“Real estate moves slowly”
“I can fix a bad house, I can’t fix a bad block”
“Not focused on the hottest areas, looking at the edge of hip and looking to ride the wave”
Places to Grab a Bite:
Connect with Brent:
313-422-1333
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