I’ve been saying this for a long time! Detroit’s Real Estate community is primed for a huge upswing! If you are are interested in finding deals to buy, or looking to sell/lease your commercial properties, then hit me up!
Wish You Bought Gold in 06? Youll Wish You Bought Detroit in 12.
Sorry if you slept through class and crammed for the exam, but at some point during your freshman year, yourEconomics 101 professor taught you the very basic principle advancing everyone to the next level: Buy low. Sell high. You could forget the rest of the semester’s worth of material in a blur, but be sure to take in this one key component and carry it with you through life. Right now however, investors are ignoring this basic tenet of their practice, overpaying for property, companies and brands on both coasts.
The ideal time to infuse capital into something is when it’s at the start of an upward trend, not when it’s already at its peak. Detroit has bottomed out, so now, there’s nothing but upside. Those of us here can already see the tipping point. On a quick Google search for residential property, I came across a great one-bedroom apartment in Central Chelsea, right in the heart of Manhattan. This nice property for a cute couple can be yours for a cool $2.3 million. By contrast, I also found a home in Indian Village, a 115-year-old historic district in Detroit, with palatial residences built by some of the world’s finest architects. This 7-bedroom mansion in the heart of the neighborhood, with a full corner lot and 3-car garage could be yours for just $305,000. This isn’t the extreme case of vacant lots auctioned for $200 apiece, nor is it the unfortunate case of rampant foreclosures, through which you could buy a house for $10,000; this is a well-kept home in a vibrant community. Why are you buying sky-high? You should know better.
It’s not just residential. Within a five-block radius from the downtown Detroit epicenter, you can buy a vacant building. Yes, building. My business partner Dan Gilbert has purchased approximately 3 million square feet of commercial property in the heart of downtown Detroit over the last few years through his firm, Bedrock Real Estate Services. Perhaps the most telling example is his recent acquisition of the M@dison building, where Detroit Venture Partners(where I am CEO and Managing Partner) and other startups are housed. This 48,000 square foot building was a historic theater, which closed in 1984 and the five-story structure sat vacant for decades. Located across a park from Comerica Park and Ford Field (where the Tigers and Lions each play, respectively), along a stretch with nightlife/restaurants, and within a five-minute walk to the official city center, it was a waste being empty. Gilbert purchased the building for approximately $1 million, and then put $12 million into its renovation. After opening in October 2011, the building was boasting 100% occupancy with a full-fledged entrepreneurial hub within six months… all paying market rent.
If you could go back in history to purchase a skyscraper in New York City at 1930s rock-bottom pricing, you’d be tripping over yourself with excitement to make an offer. So why then are herd-following investors too chicken to do the same in Detroit? Quite frankly, it boggles my mind – the potential financial opportunity here is so vast, it’s difficult to imagine how someone could shy away from such a chance.
Throughout history, those people who have created the most wealth and changed the way we live – like the Rockefellers, for instance – have been those willing to stomach some risk. They could see the future they’ve impacted, and they believed in making that happen, by any means necessary. Why not? If you bought gold the first week of 2006, you’d have paid $530 an ounce. By the first week of this year, that same ounce would be worth three times that – $1598. A 3x return on a longstanding commodities investment is amazing, and largely unheard of, but it’s a perfect analogy to the situation in Detroit. Buildings are either bursting at the seams with wait lists, or vacant. Let’s fill more of them while you can buy low now. Later, you can sell high – and make your Econ professor proud.
via Wish You Bought Gold in 06? Youll Wish You Bought Detroit in 12. – Forbes.