Buying an old building- urban economics

I love old buildings but can only afford to buy and fix up one of them. Using one of my top picks [[before I actually see it) I give the example of a building on Jefferson near Burns. The building includes a carriage house and an office bldg and has been vacant and vandalized several times over the past few years. it is currently boarded up and BEHIND ON ALL TAXES. Using the crime link someone provided there seems to have been another burglary within 100 yards during the last 30 days. A notorious local landlord [[theres' been a thread about her) had this bldg and let it decay - a local bank owns it now.

If I were to pay $75k and the $12k in back taxes - along with another $100k to fix up -what would the economic impact to Detroit be?

The $75k would go into the local economy.

The back taxes would be paid -as well as current ones - providing govt with a small amount of needed revenue [[ which they would waste lol).

The $100k fix up would go to local workers and materials [[I'm not bringing up a crew from South Texas -even if I knew of such a crew).

The carriage house would become a summer home - or perhaps the top floor of the building. Summers where I live are humid and in the high 90's every day- its not comfortable. A friend from here if she gets into U of Michigan Phd Education Program would live there and maybe teach in Detroit schools or consult. Obviously for any time we would live there we would be buying local food and stuff - a tiny boost for the economy. As I do mostly volunteer work here [[school board and president of the bar assn), I would probably find some time there for this stuf as well.

I would rent out one of two of the offices but as I've stated before and EastDetroit should have read it would be mostly to have someone to watch the place and keep it looking occupied- low rent. I have NO INTEREST in becoming a landlord in general - I think it would be one of the most stressful and annoying occupations. I could have been a landlord without going to graduate and law school - it has to be one of the unhappiest of occupations.

In my opinion and according to the Detroit News story -that was posted here last week its not only masses of people moving its also the educated and those with jobs -not really the ones layed off as many might think.

I love the old buildings- we don't have them here- and I hate to see them decay. There is no assurance I can get this one -the broker said they are hoping for more and I also look in Buffalo and Pittsburgh.

Interesting... I wish you the best!

If you're talking about the Book Mansion, a $100,000 will be a nice start. The front steps were/are made of what appears to be limestone and the have been worn down by the elements. They will have to be replaced. $50,000 might take care of the steps.

As far as carpetbagging. I don't think it is much of an issue. The issue is folks that buy properties and then don't provide for maintance or security be they locals or Texans.

"I would rent out one of two of the offices"

Who are you going to rent it to? Do you think it will be easy to rent?

Don't do it unless you have money to burn.

Gnome Good Guess- The book bldg is one of my favorites [[ once again only from the internet and what I've learned from others). What do you know about it?

Its seems to be vulnerable to break in -although its boarded now.

Steps are $50K?

Lodgedodger, I think he meant he was going to use part of it for a Summer home for himself. Regardless, I do agree he should visit here first.

Ocean, with this new forum, you can now "block" people, and make it so you can't see their posts. Your posts were fine until you took personal offence to criticism and made a big deal out of it. You can't control what other people think/post. Opposition is a good thing, and if the people are trolls, than others will see it and also block them. No point in making a fuss over it.

Your plan actually sounds very interesting. Maybe you would be a good candidate for the first DetroitYES blog? If you're interested, you could shoot Lowell an E-mail.

It sounds from Ocean's description of what he does that he may have the time and disposable income to take something like this on. If he wants to do it just to save the building, no problem. Also, I'm sure he could find somebody reliable to rent office space if he offered it cheaply enough.

But yeah, calling someone a moron in the thread title isn't good. It's also very unbecoming of a lawyer. We take the decorum rules seriously here - ask Geoff Fieger. Don't want DYers lodging complaints with the Bar if you ever pursue a license here.

Please discuss Detroit and keep personalities out of it.

My post seems to have disappeared from this thread. I wonder what happened. Was it deleted, and why?

Ocean, please pay us a visit before purchasing a building. Promise?

I will certainly visit before I buy anything- one can't learn everything from an online forum lol.

I hope to do this either summer or fall but kids,school board and court cases, often mess up my schedule.

Maybe a large group of posters can get together one Sunday and tour the many threads along the line of" "Most dangerous neighborhoods" or "Areas safe to walk at all hours" to scientifically determine each areas claim to fame.

We can do a head count before and after we wander each of the nominated neighborhoods and the area where we lose the most people-- "Wins!"

While I try to reserve my comments about any of the neighborhoods, I'm sure we won't find one with that sort of excitement! I walk in quite a few places in Detroit, and haven't really encountered any problems. Mind you, I know there are places I don't belong.

Well, your biggest problem is probably going to be the City, Ocean. Our local governments are a horrible impediment to Detroit's progress. I have never renovated a building, but have known plenty of people that have. Doubling expected permit approval times is not that far fetched. Sometimes that isn't even enough. You also have corruption in some areas. Many reputable contractors, and even some officials in the city government itself will probably try to put the screws to you at some point.

Beyond that, take the extra expense to personally make sure the construction site is secure at all times. Never leave it to contractors to protect your property as you can in some areas. The current state of Detroit isn't that far off from what is going on in New Orleans and some other post disaster cities right now. Studying the problems in post disaster cities will give you an overall view of what you can expect when renovating in Detroit. Cities like Detroit are a different breed, but learning them could definitely help you take advantage of huge opportunities in our nation's shaky future, sense most people prefer to just pass them by.

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Originally Posted by 2blocksaway

"I would rent out one of two of the offices"

Who are you going to rent it to? Do you think it will be easy to rent?

Don't do it unless you have money to burn.

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Sounds like a plan to learn an expensive lesson. Maybe that's what some people need.

I'm just saying.

Be realistic. Saying you are going to rent something out and actually renting something out [[from 1000 miles away no less) are two different things.

I wouldn't do it unless I was going to live in it full time.

Even then I would pick a different Indian Village property not near Jefferson. Street noise sucks.

Ocean, I've followed your posts on and off for several months. I'm sending this a test post, cuz I seem to have lost a couple other ones.

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Originally Posted by softailrider

Sounds like a plan to learn an expensive lesson. Maybe that's what some people need.

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Well, that all depends on the business model. If the objective is to restore and then maintain a classic property, without the motive of massive profits from rental income, then it might be feasible.

I'll always be an advocate for conscientious property owners who welcome responsible businesses into low rent, low profit margin buildings, especially if the businesses are reputable non-profits [[who can always use a break in expenses).

OK that seemed to work. Now, I just went with a friend yesterday to go look into an abandoned/foreclosed mansion on Virginia Park. I happen to know the neighbor adjacent to the property, so going into an unsecured house [[something I avoid for obvious reasons) was not the problem. The problem was the mansion, [[6 BR + 4 BR in the attic; 5 baths mostly bastardized over 40 years, but somewhat intact; mahogany staircase; 6' long pristine pocket doors, one of which was lifted Saturday; original carport attached to front porch; 3 fireplaces, awesome crown moldings, etc etc etc) was not even locked. The neighbor chased the white van away on saturday that contained the other pocket door.

The next problem was the friend, well, not so much the friend, but the emotional attachment to a 30k, 4500'sq mansion. Yes 30K.

But the real problem was back to the mansion. Obviously, this structure, along with most of the other remaining structures on Virginia Park, is so enormous, that 40 years of attempted maintenance has fallen woefully short. For example, the roof, a recent [[within 10 yrs) complete tear off, obviously was underbid, otherwise half the valleys wouldn't leak. Another example, who ever stripped the [[1 1/4") floors, gouged the shit out of half of them, and all the outside corners look like shit. The bathrooms were mostly still original tile [[3x6 subway) and flooring [[honeycomb), with no cracks in them, except where a hack plumber, [[or several) just took a hammer to them to replace fixtures or "make repairs." All original sinks and toilets were long gone, replaced by home depot crap. The shower stall still had six heads [[5 original) but once again, the "Speakman Mix-o-meter" was ripped out and replaced by a delta, with a piece of 12x12 stick floor tile covering the repair.

Ok. What's my point? Never mind the boiler needs to be replaced, several rounded windows need to be reglazed, there are no storms, the chimney needs a couple thou of work, the hanging ceilings need to be ripped out and patched properly, and, oh, expect an 800 dollar gas bill in November, saying nothing of the colder winter months.

The first point is, I can't even begin to think about any plaster repair, painting the really cool crown moldings, or painting 4 or 5 colors in the awesome living room [[with all that cool ass trim), or restoring the bathroom with original or "period" fixtures until a minimum of 50-75K has been spent before the house is even habitable. And what's a kitchen? And this house isn't even that fucked up [[it could be alot worse, most of the plaster is rock solid, save for a few ceilings, but not for long............)

The second point is, you will never, ever get your money back. If you can survive the asshole and substandard contractors, if you survive the good ones who will charge a hefty premium because of all the "unseens", if you can minimize theft of materials and tools, figure in taxes and a [[$4000) four thousand dollar a year gas bill, you will want to live there the rest of your life.

A house that size will significantly alter your lifestyle. If you have significant resourses, and plan on staying, and won't go busted when the price tag on the roof goes from 25-35k, by all means, we'd love to have you. If you don't have significant resourses, it will look like all the other mansions/boarding houses that line Virginia Park, the Boulevard, Cadillac Boulevard, and as of late Boston Edison.......it will look like someone had big dreams and hopes, and at one time lots of cash, but when all the bullshit hit the fan, it looks like an old abandoned mansion.

Hamtragedy, depressing but true. Hope your post is a wake-up call for anyone who's even remotely interested in buying a house like what you saw.

I told my "Oldest Daughter" one time."If you 2 girls were outta school , I'd live in Detroit". But from the discription of the Virginia Park Mansion, It could be my house in the burbs.

thanks -the responses have been informed and logical. My mind is quite open and the situation would have to be perfect. I'm used to big city crime but statistically Detroit is really the worst and it may be more than I'd feel comfortable with. Of course reading about the two college kids shot and killed at Wayne St last night [[ a better than avg area), is not very appealing but if I could just blow it off as a rare incident it would be easier. Remember my decision would also -at least in part -be based on whether my friend is accepted to the U Michigan phd program-she's lived all over the world but not Detroit.

Like anything else monetary its a risk-reward situation. That Book building once went for over a million and it wasn't long ago. If it really needs that much work then it would have to sell for less.

Part of my premise is that by late summer or fall - Detroit prices will have dropped ever further and that those making any offers at all on these houses will be few and far between. At some point - people like me may move into Detroit because of the cheap housing [[ the tax system needs to be adjusted though) ----Crazy people like me.

Thanks for all the responses!

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Originally Posted by Vince

You could blow it off as an rare incident or you could research that it happened well off campus to two Wayne State students. Have you visited Detroit outside of Google? Just asking....

-Vin

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A bit harsh, perhaps. But I think most Detroiters would agree with me when I say that most people who get seriously injured or killed by crime in the city either a) were involved in crime themselves, or b) have close friends/relatives that are involved in crime. There aren't many random shootings, whatever the national magazines or television programs say.

I only visited once - it was years ago during a summer. Didn't wander too much as I didn't have an interest in old buildings. Saw Tiger Stadium - almost went to a game and the bridge -river area.

The murders last night are anecdotal evidence- it could happen everywhere. From the story [[for what that's worth) they were doing nothing wrong -just a failed robbery. The combination of published stats and the stories do have an effect. In the threads about neighborhoods, safe/unsafe areas I hear defenses like "I visited there and it was ok, the only places I was ever mugged were X and Y safer areas" Once again a couple of years ago I wandered the worst areas of Buffalo and Pittsburgh- after being warned by locals to stay away. My experiences were positive people who may have started off a bit hostile "Can I help you?" usually were ok with answering questions about the building or block I was looking at.

Anyway meanwhile I gather information and try to provide insight and perspective on what might be a good ideas for Detroit.