Posted by Maria on November 12, 2004 at 09:19:51:
Thanks for your posts. I glad to hear some different opinions other than my best thinking.
Detroit river condo - Posted by Maria
Posted by Maria on November 10, 2004 at 10:32:07:
Hello everyone,
I would like to hear opinions about investing in a condo on the riverfront for appreciation. I believe the downtown surrounding area will appreciate in about 5-7 years based on newspaper articles. I’ve read articles about Houston and their economic turnaround but I know this is Detroit. I’ve been trying to find research for both pros and cons for this type of speculation. I’m fairly new(3yrs) and own sf rentals on the westside of Detroit. I’ve had nice equity appreciation in these although rents have dropped.
I’m willing to absorb the negative cashflow with a partner for a couple of years for the appreciation. I would like to either rent it straight out for 1yr or try it as a corporate rental. The condos are going to be converted in the spring of 2005. The one I’m interested in is on the 27th floor and the dining and living room overlooks the bridge, river, and marina. Its two units combined to a 3bd/3ba, 1800 ft unit that can be easily separated. I’ve been told that rentals will be limited to 20% of the units on a first come first serve basis to protect value.
I am concerned about the supposed housing bubble, and the economy, so I’m trying to find out more info about this and any help would be nice. Book suggestions are welcome.
Has anyone bought property in the downtown area and what are your experiences?
Does anyone feel downtown Detroit will comeback and if so when? What about superbowl 2006?
What about the rising rates and the home value decrease?
Advice from investors who lived the ups and downs of the economy would be appreciated.
Maria
Re: Detroit river condo - Posted by E.Eka
Posted by E.Eka on November 10, 2004 at 17:07:57:
Appreciation should be a bonus to an investment, never an investment strategy. The appreciation is speculation and the questions you’re asking require answers that only God could answer. I’m not trying to sound rude, but buy at the right price where you make money on the purchase. Have a realistic exit strategy that has some resemblance of common sense.
It’s like asking if you should buy google stock b/c it’s gone up in the past. The next day, it could collapse, but if you bought at the right price, you’ll still be in it ok through the bad times.
The people who write the newspaper articles aren’t investing…
Re: Detroit river condo - Posted by Dick Chelten
Posted by Dick Chelten on November 11, 2004 at 16:46:36:
Maria: Hello to a fellow Detroit area investor. You can see us online at www.marketplacehomes.com. I wouldn’t buy new detroit city properties for speculative purposes. However, I think there are many people who really want to live in one of the river Condos who have bad credit, but can put down 5% option money as a “down payment”. These people would love for you to buy their dream home, rent it to them for 2 years and then help them refnance in their own names for 10-15% more than what you paid for it. You charge 1% of the list price as rent plus the association fee as their rent. You’ll make around 4-5% annual cash flow if you have good credit and obtain a 90% LTV loan interest only. The beauty of this is that you now are in the transitional lending business rather than the speculative investing business.
This is what we do, but we concentrate more on suburban homes than city property.
Good luck to you.
Dick Chelten