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Posts tagged with ‘detroit’

Why Detroit? An Answer in Three Parts

by Tim

A month or two ago, someone came by the Rebirth Realty house to chat about that project and the community we’re building here. Of course, since the projects are so intimately intertwined, we ended up discussing Castle as well.

Max handled most of the questions, pitching the idea and elaborating in all the right spots. Eventually, the question came: why start Castle in Detroit? I jumped in right away with my answer.

One: Detroit = Real Estate

As I wrote about in an earlier blog post, Detroit is synonymous with real estate—in my mind anyway. The negative side of the association is, of course, blight; we practically define the term “ruin porn.” The positive side, however, is the massive opportunity for redevelopment. The secret’s out by now of course; previously abandoned buildings are coming back to life all over the city.1

Two: Property Management Here Is Terrible

The bar here in Detroit is low. Very low. Ask any rental property owner in town to recommend a property management company, and they won’t be able to honestly provide you with a single name. The market is here, but it’s radically underserved. The larger area of Southeast Michigan has some great options, but firms who operate in the suburbs generally hesitate to head into the city. We’ve heard it over and over again: a property management company in Detroit that’s actually good can make a killing. We’re not really in it for the money,2 but we do have to make payroll every other week.

Three: Our Roots Are Growing Deep

As it turns out, living in a place for more than two years earns you a certain familiarity with it. We started with the VFA network of Fellows and supporters, but now we have our own networks too. Of particular importance are the connections in the investor and real estate communities, both of which operate on personal relationships. Why would we uproot ourselves now, just when we’re starting to see returns on our network-building efforts?

In short, we’re in the right place, in the right market, with the right connections. Combine the old real estate saw of “Location, location, location” with the startup mantra of “Team, market, product,” and you can see why we’re pleased to call Detroit home.

  1. I won’t pretend the revitalization is evenly distributed, but there are rehab projects in even some of the farther-flung neighborhoods. Credit goes to the many community development corporations there.
  2. So Millennial, I know.

Detroit = Real Estate

by Tim

Detroit is famous for a lot of things: Henry Ford and his Model T, the Arsenal of Democracy, Motown, Eminem, and more. It is equally as infamous for some others: race riots, corrupt mayors, and the largest municipal bankruptcy of all time.1 In the popular imagination, I think Detroit means one thing: blight.

The classic Detroit blight photo. What you don’t see is the row of beautiful, occupied houses just down the street.

Anyone who is at all familiar with the city knows what I mean: the vast sea of abandoned, beat-up, burnt-down structures that seems to cover all 139 of Detroit’s square miles. Every neighborhood in the city, from Brightmoor in the west to Indian Village in the east, has at least one of these eyesores. Not even Downtown is exempt; even now, the Wurlitzer Building continues its run as a black eye on the skyline. Blight is such an issue that Detroit has an entire Blight Removal Task Force dedicated to conquering the problem.

Take a step back, though, and you’ll see that blight is only one aspect of a greater whole: real estate. Real estate is a constant subject of discussion in Detroit, from blight and demolition to rehabs and construction. Take a drive down Woodward, Detroit’s premier avenue, and you’ll see what I mean: skyscrapers in Downtown, the Ilitch’s nascent entertainment district just across the bridge in Midtown, new construction all around Wayne State, and a whole hodgepodge of buildings up through Eight Mile. You can’t make that trek without thinking about the past history and future opportunities of real estate in Detroit.

The idea of real estate isn’t just in the city—it’s in the citizens, too. The status of buildings and neighborhoods is a constant subject of conversation. People at parties will speculate about what the old apartment building down the street will be in two years, or what the M-1 Rail will do for Woodward’s storefronts, or what neighborhood all the young people will flock to next.

The fabled $500 house is the keystone example of the imagination spent on property in Detroit. The price tag lures you in, tempting you to build a real estate empire in your mind. Of course, the unpleasant reality of a dirt cheap house is the expensive rehab to go with it, and your empire pops right out of existence again. Once you start investigating property in Detroit, though, the dream never fully leaves you. We started Rebirth Realty as part of that collective dream, and we’re working on Castle to help investors and landlords with dreams of their own.

Bit by bit, the dreamers are finding the true real estate opportunities in the Motor City and making an impact. The city’s renaissance is here, and real estate is the linchpin holding it all together. Here on the ground, Detroit means real estate.

  1. I won’t weigh in on which camp ICP falls into.