East English Village

**Dan Wesson** · March-15-16, 11:23 PM

Mortgage amortization front loaded interest and all the related costs involved should be considered.

Then there's people who buy property in the summer when things are beautiful.

Then discover they can't get up their drive way in the winter or the water that finds it's way in during the rainy season, either through the roof or coming in the front door.

Then there is the uncertainty of finding yourself a target of people/neighbors you have no control over.

Absolutely no reason to get rushed into anything.

**Honky Tonk** · March-16-16, 04:34 AM

Originally Posted by Bucket

What's your point? This incident happened miles from EEV. Might as well have been in St. Clair Shores.

How many miles from EEV and how many miles from SCS?

**Honky Tonk** · March-16-16, 04:49 AM

Originally Posted by belleislerunner

I always laugh at the logic of people who say "rent first" - as if you can't determine an area is nice in a few days/weekend of visiting.

Let's see if I spent $1,000 a month in rent - that's 12K a year or 24K in two years.

If I had bought the house on day one - I would have had 25% equity gained in it, not counting appreciation.

Rent first = stay poor forever while someone else gets the equity gains [[i.e. you're paying the mortgage for your landlord. What sane person would do that?)

Let's see, if I rented and the neighborhood went to hell, I could move. If I purchased, put down a sizable deposit, either paid or owed property and personal tax, paid for City mandated or necessary building repairs, the neighborhood goes to hell or becomes questionable, your property becomes not so desirable and you can't sell @ a price point to recoup your investement, how much do you stand to make then?

**Cincinnati_Kid** · March-16-16, 09:00 AM

Originally Posted by Bham1982

Homeownership makes zero sense unless you're confident that you'll be in the home for a long while [[probably at bare minimum 7-8 years). Even then it's a crapshoot.

Homeownership is only a solid bet if we're talking very long-term residency. 10-15 years at minimum. In other prosperous countries, places like Germany, most people rent, and there is no problem. For some reason many Americans feel they have to own regardless of situation in life.

And in Michigan you need to be extra careful, because long-term appreciation is pretty minimal. This isn't NY or CA. No one's property is going to be worth double in 7 years.

Exactly, especially here in Mich where home values generally run lower than the national average. There are pros and cons to each one. Renting makes sense for a lot of people, that don't want the responsibilities of home ownership, and if the area the home is in turns out not be what was expected, they aren't tied down to it, they can just leave. I get the tax advantages and such, but the bottom line is having a roof over your head, not what course you choose to achieve it.

**Zacha341** · March-16-16, 09:49 AM

Actually the east side of Detroit is smaller than the west. Just staying.

Originally Posted by corktownyuppie

Ya, agreed. I lived in EEV for a long time. I don't think I've been anywhere near E. Warren and French Rd. Media has to stop referring to the "East Side" or "West Side". Talk about useless information. The "East Side" is big enough to envelope 10 small suburbs.

**RageRoolz** · March-16-16, 10:53 AM

Originally Posted by Cincinnati_Kid

Exactly, especially here in Mich where home values generally run lower than the national average. There are pros and cons to each one. Renting makes sense for a lot of people, that don't want the responsibilities of home ownership, and if the area the home is in turns out not be what was expected, they aren't tied down to it, they can just leave. I get the tax advantages and such, but the bottom line is having a roof over your head, not what course you choose to achieve it.

I don't think you do "get it" Homeownership has been the primary wealth building vehicle for Americans for a very long time. It is like you are telling him to not invest in stocks cause the company can fold. Of course there are risks with any investment, but if the potential for return are there then it still makes sense.

I bought my home in July and it was a benchmark for my neighborhood. One of the highest sales in 5 yrs easily. Now the home right down the street in worse shape than mine sold for 3% more about 6 months later. I agree that you should not view the city with rose colored glasses, but some people one here are acting like it is a bad investment by definition.

Getting tied down is a real concern, but quit acting like it is so likely that he will be forced to relocate soon due to changes in his circumstance. He is from the area and even if he gets a new job it will be easy to commute from. Gotta love the freeways...

Anyways I want to answer the OP's question

EEV is a nice area. It is also a fairly low income area but is very quickly being populated by more and more people who think like us. I bought int he area despite people telling me not to. It is working out great. I have had zero issues. I feel safe, nothing stolen, nothing broken. Packages delivered on my porch and left for hours remain waiting for me. Driving up Mack into GP is the best way to shop. Better selection, better prices. If you like pizza try Mama Rosa's.

I personally know 3 people who have purchased in your area. Myself I am a little more north in cornerstone village. I hang out at my friends who is in EEV. Nice area, but not high class. More and more people think like us and are purchasing homes there. We tend to be mid 20's, have good paying jobs, and commute to downtown. There are more and more people who are like us moving into the area. The negative Nancy's who post here and act like you are dumb left long ago during a different time or they never even lived here.

People talking about being tied down also probably have never had any substantial savings and assume most people buying a home are maxing their credit. However by home was roughly 60k when I bought it. I pay extra on the mortgage. I have it set up as if I am paying what my rent was downtown[[about 1k). This will pay my home off in 2021. When I bought my home it came in at 64k. The high sales price for my home was 150k in the early 2000's. I don't think it will ever get that high, but if it even climbs to 100k I will make out like a bandit. The total amount of interest spent will be about 8k. It was about 5k out of my pocket to buy it[[down payment, costs, ins). Even if I sell my home right when I pay it off and it sells for exactly what I paid for it, it will be a far superior use of my money compared to renting.

Keep spreading the good word OP and get your friends to buy in the area too. Better neighbors, better neighborhood. Better neighborhood, better values.

**MrMichigan** · March-16-16, 11:14 AM

Thanks RageRoolz, all the best.

**corktownyuppie** · March-16-16, 11:51 AM

Originally Posted by Bham1982

LOL, no. Complete bullshit.

The only way a residential property doubles in value over a few months is if we're talking major upgrades, which obviously need to be factored in. Or the initial purchase price wasn't an arms length transaction.

Properties in MI have generally appreciated around 10%-20% over that time period, and no, it isn't highly variable based on location. There is no location in MI that is radically different than 24 months ago. You can't buy a house and flip it as-is, for twice the cost in 24 months, anywhere, unless the initial seller or end buyer are idiots.

Had some time to think about this. Other than the part where you essentially accuse me of lying, your general thesis on real estate is accurate. Properties have general appreciated around 10-20% over the last 3 years, and -- on aggregate -- it isn't highly variable based on location.

There are 3 areas where your thesis, however, does not apply:

[[1) Access to Capital. There are tons of properties that have seen much higher-than-normal appreciation not because of anything fundamental about the are it's in, but rather because lending has been made available. For example, right on Woodward by Comerica Park, there were foreclosures that were listed for a song. Perhaps $90-100k back in 2013 when I purchased my townhouse. But one problem...all the kitchen appliances had been removed and some of the plumbing was missing. Despite the fact we were talking about only $10,000 in repairs needed, the issue was that no bank was willing to take these properties as collateral. Therefore, you limited all your buyers to those who were sitting on $100,000 in cash.

Once the properties were brought back to habitable condition, which frankly cost very little, the property values shot up. How much is it now? I can tell you that you're not going to see $90,000 anytime soon.

The thing, though, is that in Detroit there were hundreds of properties like this. These were not isolated incidents.

[[2) Foreclosure glut. Back in 2012, early 2013 there was still tons of inventory that was coming out of foreclosure, and banks looking to unload the property were artificially lowering both sales prices or appraisal values. So not only were you seeing properties for prices that just didn't make sense, that same dynamic was also affecting people's ability to finance homes. [[See #1) Nothing fundamental really changed about the neighborhoods. But prices were [[temporarily) at ridiculous numbers.

[[3) Fundamental Changes / Development. 6 years ago, much of the downtown crowd had hardly heard of Indian Village. Now most the homes there are relatively new residents, transplanted from downtown, many with children under 4 years old. And as Indian Village got pricier again, people started flooding into West Village -- which 6 years ago might as well have been a neighborhood on Mars. No one knew about it. Now West Village prices are at valuations that are starting to look like normal, healthy neighborhood prices...but they're easily 2x as much as they were 3 years ago.

Generally speaking, Metro Detroit real estate has not seen the kind of growth that you might see out in Silicon Valley or in Dallas. There's no question about that. And you'd be a fool to purchase in Detroit today with the expectation of doubling your money in 2 years simply because of a rising tide of real estate valuations.

But on a micro, block-by-block, deal-by-deal basis, there are plenty of opportunities to be had. As happy as I am about my deal in Corktown, one of my neighbors picked up an identical unit 6 months after I did...for $30,000 less.

So maybe I was the idiot.

**ABetterDetroit** · March-16-16, 03:16 PM

If someone is looking to make money in real estate or any other legal investment you have to assume risk. If they require a sure thing there is always T-bills or FDIC bank interest but you pay for that security.

Everyone is different and trying to apply a risk that one would take when another wouldn't is ignoring the fact that the two individuals likely have very different goals.

**DetroiterOnTheWestCoast** · March-16-16, 08:40 PM

Originally Posted by Bham1982

Homeownership makes zero sense unless you're confident that you'll be in the home for a long while [[probably at bare minimum 7-8 years). Even then it's a crapshoot.

Homeownership is only a solid bet if we're talking very long-term residency. 10-15 years at minimum. In other prosperous countries, places like Germany, most people rent, and there is no problem. For some reason many Americans feel they have to own regardless of situation in life.

And in Michigan you need to be extra careful, because long-term appreciation is pretty minimal. This isn't NY or CA. No one's property is going to be worth double in 7 years.

I would come to exactly the opposite conclusion, especially regarding purchasing in the city. The ratio of rent to the value of properties in Detroit can make buying very attractive, even without substantial appreciation. Take Corktown's IV adjacent investment. Its renting for $800/month on a $40,000 house. $9,600/yr; that's 24% of the value of the house. Show me a $400,000 house in the burbs that rents for the same ratio - that would be $96,000 a year.

If Corktown's tenants rent for 10 years and he never increases the rent, they would have spent $96,000 to rent a $40,000 home and have no equity. How is that better than if they had bought the house, even factoring in the other expenses of ownership, and even if it has minimal or no appreciation?

**Dave70** · March-17-16, 08:37 AM

Originally Posted by RageRoolz

We tend to be mid 20's, have good paying jobs, and commute to downtown. There are more and more people who are like us moving into the area. The negative Nancy's who post here and act like you are dumb left long ago during a different time or they never even lived here.

.

Just curious if you have kids or not?

**softailrider** · March-17-16, 05:20 PM

Originally Posted by DetroiterOnTheWestCoast

I would come to exactly the opposite conclusion, especially regarding purchasing in the city. The ratio of rent to the value of properties in Detroit can make buying very attractive, even without substantial appreciation. Take Corktown's IV adjacent investment. Its renting for $800/month on a $40,000 house. $9,600/yr; that's 24% of the value of the house. Show me a $400,000 house in the burbs that rents for the same ratio - that would be $96,000 a year.

If Corktown's tenants rent for 10 years and he never increases the rent, they would have spent $96,000 to rent a $40,000 home and have no equity. How is that better than if they had bought the house, even factoring in the other expenses of ownership, and even if it has minimal or no appreciation?

I don't have a lot of disagreement with what you wrote with the exception of the middle of the 1st paragraph. Your arithmetic is perfect assuming the tenants actually pay their rent. Doesn't happen all the time, maybe not even most of the time.

**TTime** · March-17-16, 05:41 PM

Originally Posted by DetroiterOnTheWestCoast

I would come to exactly the opposite conclusion, especially regarding purchasing in the city. The ratio of rent to the value of properties in Detroit can make buying very attractive, even without substantial appreciation. Take Corktown's IV adjacent investment. Its renting for $800/month on a $40,000 house. $9,600/yr; that's 24% of the value of the house. Show me a $400,000 house in the burbs that rents for the same ratio - that would be $96,000 a year.

If Corktown's tenants rent for 10 years and he never increases the rent, they would have spent $96,000 to rent a $40,000 home and have no equity. How is that better than if they had bought the house, even factoring in the other expenses of ownership, and even if it has minimal or no appreciation?

Your optimism is admirable, especially considering Detroit's history. As I read your question I laughed to myself and thought very quickly of a half dozen reasons why renting is the better option with the #1 reason being you are free to move easily if things don't improve or go further to shit.

**ABetterDetroit** · March-17-16, 10:13 PM

You might want to be careful to who you listen to if your thinking about buying a home in Detroit. Avoid the ones that have a axe to grind and pay more attention the ones that have actual data based on some stats and trends.

http://fortune.com/2015/10/26/best-cities-wealth-rich/

**Dan Wesson** · March-18-16, 03:10 AM

Quality of life?

**Honky Tonk** · March-18-16, 06:23 AM

Originally Posted by ABetterDetroit

You might want to be careful to who you listen to if your thinking about buying a home in Detroit. Avoid the ones that have a axe to grind and pay more attention the ones that have actual data based on some stats and trends.

http://fortune.com/2015/10/26/best-cities-wealth-rich/

Great post, ABetterDetroit. Welcome aboard! Which neighborhood, here in Detroit, did you end up buying your home in?

**ABetterDetroit** · March-18-16, 07:32 AM

It's below

**ABetterDetroit** · March-18-16, 07:41 AM

Originally Posted by Honky Tonk

Great post, ABetterDetroit. Welcome aboard! Which neighborhood, here in Detroit, did you end up buying your home in?

In market for the right property. Inventory is quite low in my main intrest, one will come along sooner or later. Looking forward to it tho-

**Honky Tonk** · March-18-16, 10:33 AM

Originally Posted by ABetterDetroit

In market for the right property. Inventory is quite low in my main intrest, one will come along sooner or later. Looking forward to it tho-

So you're still in Macomb? Ok.....

**ABetterDetroit** · March-18-16, 11:22 AM

Originally Posted by Honky Tonk

So you're still in Macomb? Ok.....

I fail to see how anyone intelligent can continue to push the "City vs. Suburbs" mantra or vise versa that has lived in southeast Michigan for any length of time. It has proven over and over to be a attitude that leads to complete failure. No other city in the United States has this contention within itself nor has any city suffered through problems on the scale that Detroit has. The human and high financial cost for hating on your neighbor around here alone should be enough to finally change it if you give a damn about either of those reasons.

**Honky Tonk** · March-18-16, 12:51 PM

Originally Posted by ABetterDetroit

I fail to see how anyone intelligent can continue to push the "City vs. Suburbs" mantra or vise versa that has lived in southeast Michigan for any length of time. It has proven over and over to be a attitude that leads to complete failure. No other city in the United States has this contention within itself nor has any city suffered through problems on the scale that Detroit has. The human and high financial cost for hating on your neighbor around here alone should be enough to finally change it if you give a damn about either of those reasons.

I fail to see how anyone intelligent can possibly recommend that someone else take the plunge while they sit 20 miles away in a completely safe neighborhood. As far as me "hating on my neighborhood", I deal with the nonsense here day and day out, 24-7. It's a whole different ball game then watching the news, reading an article, or playing armchair quarterback.

**ABetterDetroit** · March-18-16, 01:15 PM

Originally Posted by Honky Tonk

I fail to see how anyone intelligent can possibly recommend that someone else take the plunge while they sit 20 miles away in a completely safe neighborhood. As far as me "hating on my neighborhood", I deal with the nonsense here day and day out, 24-7. It's a whole different ball game then watching the news, reading an article, or playing armchair quarterback.

And on it goes...

**Honky Tonk** · March-18-16, 01:27 PM

Don't rub my nose in it. You're the one making calls from your living room, 20 miles away. "Look @ this magazine article"... Please....

**ABetterDetroit** · March-18-16, 01:57 PM

Originally Posted by Honky Tonk

Don't rub my nose in it. You're the one making calls from your living room, 20 miles away. "Look @ this magazine article"... Please....

Nobody's rubbing your nose in anything but yourself. It's a free country for everyone, including honky tonk.

**Bham1982** · March-18-16, 02:27 PM

Originally Posted by ABetterDetroit

You might want to be careful to who you listen to if your thinking about buying a home in Detroit. Avoid the ones that have a axe to grind and pay more attention the ones that have actual data based on some stats and trends.

http://fortune.com/2015/10/26/best-cities-wealth-rich/

Which is an ironic comment because you try and refute previously posted data with anecdote, and your link doesn't even have anything to do with the City of Detroit, it's a ranking of metros.