You often see examples of history repeating itself.
Of course the trick is to avoid making the same mistakes again.
Well today I’ve got an interesting one for you.
And I hope it gives you something to think about when you decide where to invest your hard earned cash.
You see, Molly from Malaysia wrote to me last week…
“I want the prices of Detroit and the yields you get in Detroit – I just don’t want to buy in Detroit. Haven’t you got the same deals somewhere like New York City?”
Obviously my answer was a resounding “no”.
It’s simply not possible.
The thing is, Molly was put off Detroit when the City filed for bankruptcy in July 2013.
Of course, the good news is the City officially exited bankruptcy on 21st November 2014.
But did you know this?
New York City (NYC) was on the cusp of filing for bankruptcy in 1975.
You see, after the city’s population peaked in 1950 many people moved to the suburbs.
In fact, by the 1970s nearly one million people had left NYC.
This was accompanied by an economic slump as businesses left for places where it was cheaper and easier to operate.
Crime rates soared.
Homeless people and drug dealers occupied abandoned buildings.
And NYC’s welfare bills spiralled out of control.
Things got so bad that on October 17th 1975 the city’s lawyers went to the State Supreme Court to file for bankruptcy.
And had it not been for a last minute US$ 2.3 billion federal bail-out, NYC would have gone bankrupt.
Why should this matter to you?
Because much like Detroit in recent years, the financial crisis and high crime rate led to a widespread belief that NYC was in irreversible decline.
But with the benefit of hindsight you know that is nonsense.
Just look at the figures…
If you bought a property in NYC in 1975 and paid the average sales price it would have cost you US$ 75,710.
Today your property would be worth US$ 516,600.
(Source: Federal Housing Finance Agency)
That’s 582% in capital growth alone.
A US$ 440,890 profit.
Now I’m not telling you Detroit is going to become the next NYC.
But it does have a lot going for it:
- Busiest checkpoint on the US-Canadian border
Last year US$ 157 billion worth of goods travelled between Detroit and Windsor in Canada.
- Massive investment
Over US$ 7.06 billion dollars’ worth of investment projects are currently underway in Detroit.
- Auto Industry thriving
The big 3 auto-makers are all making large profits again.
- Fortune 500
17 Fortune 500 companies have their headquarters in Metro Detroit.
And right now you can’t beat Detroit from a property investor’s point of view:
- Property in Detroit is 18% undervalued
That makes it some of the most affordable in the whole USA.
You can still buy property for 60.74% less than peak prices.
- Property prices rising
Since November 2011 the median sales price in Metro Detroit has risen by a staggering 198.27%. It now stands at US$ 173,000. Experts predict property prices will rise another 9% this year
(Source: Realcomp II)
- Rental rates increasing
Detroit ranks number 1 in the top 20 markets for rental yield in the USA. Experts expect average rents to climb up to 14.62% by the end of 2017.
- Housing inventory
Inventory has dropped 64.56% since 2010. In March 2010 there were 37,566 properties on the market. By September 2017 there were only 13,315.
- Property demand is rising
Over the past 2 years the population of Metro Detroit has grown by 11,088. On top of that 320,589 new jobs were created in the past 3 years. Detroit is expected to add 60,000 residents by 2040.
(Source: US Bureau of Labor Statistics)
The truth is, you will struggle to find fundamentals as favourable as these in any other US city.
But you have to ask yourself – how long is this going to last?
Do you have the courage to buy now like some very rich people did in NYC back in the 1970s?
Or will you wait until property prices rise even more and your opportunity is gone?
As always the choice is yours.
But if you would like to see a full list of investment properties in Detroit before it’s too late – just reply to me.
Let’s have a quick look at a few that are available right now.
Ravendale is a quiet neighborhood of mainly owner occupied houses in East Detroit.
This property is on the historic East Outer Drive – a tree-lined boulevard designed in 1918.
The neighborhood is always popular with tenants because it is only a short walk to the shops, banks and restaurants on Harper Avenue and Glenfield-Lannett Playground.
It is also just a 4 minute drive to Chandler Park Golf Course and the Family Aquatics Center.
The house has 3 bedrooms, 2 bathrooms, a living room, a kitchen, an 800 sq. ft. basement and a 6,098 sq. ft. garden.
It is on offer for US$ 64,995.
Your monthly rent is US$ 900.
Your net yield is 12.73%.
That’s US$ 8,273 in your bank account every year.
Want full details?
Simply reply to me.
Barton McFarland is an established neighborhood in Southwest Detroit.
It is 12km from Downtown Detroit or a 13 minute drive.
Many people living in Barton McFarland work in Dearborn which is just a 5 minute drive from this property.
This is because property prices in Dearborn are much higher than in Barton McFarland.
But it also means demand for housing is high.
And this is already starting to push up property prices and rents.
So you are likely to benefit from strong capital growth.
This property is 1.9km to Mackenzie Elementary Middle School and 1.2km to Laker Park.
The shops, banks and restaurants on Wyoming Avenue are just a 5 minute walk.
The house has 3 bedrooms, 1 bathroom, a living room, a kitchen, a 728 sq. ft. basement and a 4,792 sq. ft. garden.
It is on offer for US$ 41,495.
Your rent is US$ 725 per month.
Your rental yield is 16.18% net.
That’s US$ 6,714 in your pocket every year.
Want to know more?
Just reply to me.
Morningside is in Southeast Detroit next to affluent Grosse Pointe.
It is 16km from Downtown Detroit or an 18 minute drive.
A lot of money has been spent regenerating this neighborhood over the last few years.
As a result it is popular with parents and children.
So there is high demand for rental property in this area and property prices are rising fast.
This property is 200 meters (0.1 miles) from J. E. Clark Preparatory Academy and the shops, banks and restaurants on Mack Avenue.
And just 10 minutes’ walk to Messmer Playground and East English Village Preparatory Academy.
This is a 2 storey multi-family house.
It has 2 bedrooms, 1 bathroom, a living room and a kitchen on each floor.
There is also an 850 sq. ft. basement and a 6,839 sq. ft. garden.
This property is on sale for US$ 69,995.
Your rent is US$ 1,100 per month. Each tenant pays US$ 550.
Your net return is 15.30% – after all expenses.
That’s US$ 10,710 in your hand every year.
If you would like to know more – simply reply to me.
Remember all our USA investment properties are:
- Fully renovated – average cost of works US$ 20,000
- Freehold with full warranty deed
- Already tenanted with pre-screened tenants – you get paid from day one
- Professionally managed – your rent is paid on time into your own bank account
Plus, with our Detroit properties you get all this completely free:
- Free Title Insurance
- – value US$ 499
- Free 1 year Property Insurance
- – value US$ 495
- Free 12 month Home Warranty
- – value US$ 700
Total value = US$ 1,694.
I won’t offer you unrealistic guarantees which can’t be fulfilled, like some people I could mention.
But I do promise you…
- Your vacancy rates will be very low (last 3 years 3.58% average)
- You will always get paid what you are due
- I will stay right by your side for as long as you own your property
It doesn’t matter if it’s 3 months or 30 years – if you have a problem I’ll be here to help.
Because I know that if you get the returns you are expecting you’ll come back for more.
You might even refer your friends and family, if I’m really lucky.
And unlike many of my competitors I don’t charge you a finder’s fee, an enabling fee or an arrangement fee.
In fact I don’t charge you any fees at all.
So if you would like full details of what’s on offer in Detroit – just reply to me.
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