East English Village

[softailrider]

Rent first............

That just makes too much sense.

[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?)

[MrMichigan]

Exactly belleisle. It makes way more financial sense to buy.

[Dumpling]

I do have to admit that living in Detroit could stress one out to the point where
one buys, for example, Meijer brand oatmeal cookies as comfort food. [[Kars
Sweet n' Salty in the giant purple bags is my go-to).
Last year I was tending the vacant for-sale house down the street and found a
letter from a state prisoner in the mailbox. Various things possible here...safest
just to do a return-to-sender. But no. Wrote to the prisoner and asked where,
since the house was vacant, did he want the letter sent. Have been corresponding
since then. He was happy to get mail. He was apparently a gang member while
living in Detroit. Could be again when he gets back, but makes claims against
wanting to do that in his letters. Michigan Department of Corrections has a site
OTIS that you can use to check misplaced mail against.

[Dumpling]

In my opinion you are a Detroiter even if you live out in Shelby Township. Anyone
living in the tricounty area Wayne-Oakland-Macomb is as I see it. Regardless thank
you for committing to live in a good part of the old city - you will probably find
yourself making good improvements - being the change - very soon.

[MrMichigan]

Thanks Dumpling

[Honky Tonk]

http://www.fox2detroit.com/news/loca...08038618-story

[Onthe405]

My aunt and uncle used to live near Harper & Kensington in a pretty nice area. They left during the recession though when they said it was going downhill...

. .and you might want to think about what the value of your house and quality of the neighborhood is going to be during the next recession, which is inevitable. With history as a guide, it's not too far off, either. This is particularly important because you may, outside of your own control, be forced to sell during the downturn period [[whether it be due to job relocation, job layoff, or other domestic circumstance). . .be proactive, and plan for this as a "worst case scenario".

People are motivated to buy [[vs rent) for a host of reasons. IMO, the #1 motivation to purchase a home is the same as putting money into the stock market: as an investment. Having a place to call your own is a great side-benefit, but it also takes a lot of commitment [[maint, improvements, taxes, et al). The latter is the short-term sacrifice for the long-term financial benefits of the former.

Also like the stock market, real estate is cyclical [[sometimes to the point of volatility), but the strategy is the same: think either slow & steady growth neighborhoods [["blue chip") or short-term turnaround [[speculative, but quick & larger payoff). "Blue chip" neighborhoods are those most likely to retain their value 20-30 years from now. If you are forced to sell during a downturn, the hardship will be much less. Emerging, speculative neighborhoods are great if you get in on the ground floor of an upward trend, but are financially disastrous if the neighborhood never actually "emerges" as expected.

I'm neither pro or con re EEV, but simply offering financial advice in that your home is your single largest financial commitment. Before making an offer, take a serious, realistic look at where you think the neighborhood will be 10-20 years from now [[including schools--which are a resale factor). If, instead, you are seeking a quick flip because the neighborhood is on the upswing, be in tune with national & local market RE trends--they change quickly, and timing is everything.

The bottom line is that RE and autos are not the same market strategy. An auto you buy primarily for functional, personal use. It's a one-way financial sinkhole that has little or no value when you are finished with it. RE, on the other, holds the potential for long-term financial gain, but the real estate mantras of "location, location, location" combined with "timing, timing, timing" can't be emphasized enough.

[Bucket]

http://www.fox2detroit.com/news/loca...08038618-story

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

[MrMichigan]

405,

I'm in it for the long haul. I may not make anything off of this house and I understand that. But these houses are a great value and I feel fortunate to have found such a beautiful house for a reasonable price.

[FormerDetroiter]

MrMichigan when you say you might not make anything off of the house. Are you planning to actually live in the house or are you buying for the purpose of fixing it up then selling.

[Hermod]

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?)

I understand the economics of home purchase to include the tax advantages and the "expected asset appreciation". At the same time, "renting first" makes sense if you you not know 9f the environment will suit you in the long run, if that is the true "house of your dreams", or if you are certain the house is a good buy. Often a lease with option to purchase is a good compromise.

[softailrider]

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?)

So ,it appears you honestly believe that money saved in rent is equity gained and money in the bank, dollar for dollar when it comes to buying a house, how do you think that's true? Have you considered property taxes, maintence, insurance and other expenses? How about purchasing a house in an area where the re sale would be difficult even if all aspects of the dwelling itself are up to snuf and the real estate market doesn't re adjust downward?

Im not understanding your rationale at all.

[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.

[MrMichigan]

MrMichigan when you say you might not make anything off of the house. Are you planning to actually live in the house or are you buying for the purpose of fixing it up then selling.

I'm living in the house. As far as renovations go, the house is move in ready. I am not even a year out of college so I cannot say how long I'll be there, but I'm assuming at least a couple years.

[MrMichigan]

For everyone debating renting vs homeownership, I think you're missing the point. Yes, renting does involve less risk and costs in a city like Detroit, but it also involves basically zero investment. Why not put your rent toward a monthly payment and have a house that you can call your own without having a landlord dictate how you can/cannot live.

[corktownyuppie]

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 bought mine for under $150k in 2013. Just appraised for 300k and another identical unit is under contract for $300k right now. Real estate, especially in Detroit, is hyperlocal. Like not even zipcode hyperlocal. Like literally, block by block hyperlocal. Looking at aggregate trends has some value, but if it's your only metric, you're not going to have accurate and precise information.

That said, I do agree with the spirit of what BHam is saying. I would rent for 6- 12 months in the neighborhood you're looking at. You can use that time to both shop for a great deal in EEV as well as get to really understand everything that goes into living there. The risk of missing out on 6-months appreciation or on 6-months of building equity is totally negligible in comparison to the risk of purchasing a property and selling in less than 3-5 years. Or worse, moving out because you can't stand it and then dealing with renters that you don't know how to manage.

No place is perfect. I manage a property in Grosse Pointe Park. Great neighborhood, really old homes, never-ending maintenance issues. I lived in Livonia for 2 years. Well priced, zero culture. Even less nightlife. My parents live in Macomb Twp. Easy access to shopping, horrible access to an urban lifestyle.

I would strongly suggest you rent, even if it's just for 90 days while you're going through due diligence and qualifying for financing. It'll help you get a real on-the-ground view of everything from figuring out which gas stations are safe [[none of them after sundown), where to do your grocery shopping, whether it's ok to park in the street [[yes, but not until you've fortified your car...and even then, this is for veteran residents only). etc.

In the end, I think you'll like EEV. But I really think that you need to be making a really really informed decision before getting married to a property for 3-5 years.

Disclosure: I lived in EEV for 10 years, been living in Corktown for 6 years. Spent 10 years in between living in Ann Arbor and some of the western suburbs.

[Mind field]

I'm living in the house. As far as renovations go, the house is move in ready. I am not even a year out of college so I cannot say how long I'll be there, but I'm assuming at least a couple years.

Good for you MrMichigan! Don't listen to all the naysayers, you'll decide exactly what's right for you and what you will tolerate in the neighborhood that you live in. It seems you're reasonably aware of the risks in settling down in EEV. There's some great advice in here regarding securing your investment, and hopefully you never have to deal with any of the thugs that occasionally commit property crime in this neighborhood.

[corktownyuppie]

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

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.

[Bham1982]

I bought mine for under $150k in 2013. Just appraised for 300k and another identical unit is under contract for $300k right now. .

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.

[corktownyuppie]

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.

No bullshit. I bought it for $149,000. It appraised last August for $300k. There's an identical unit under contract for 300k. The building was built in 1996, so not a whole lot of upgrades, though I will disclose that I spent $10k finishing the basement and added an egress window and bathroom. Private msg me and I'll send you the docs. Just south of Michigan ave between 6th and Trumbull.

[corktownyuppie]

And yes, it was an arms length transaction. The sale almost fell through during due diligence because I wanted the seller to pick up a $1,000 repair, and the seller refused. Agent talked some sense into me, because I was renting in Corktown for $1600/mo. i.e. 2 weeks' rent.

[MrMichigan]

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.

Bham, this seems believable. Look at home values in Corktown, Midtown, and Woodbridge.

[MrMichigan]

Renting in an area first is ideal, but in certain neighborhoods the real estate goes too quickly. Even in EEV, the house I'm buying had 3 offers in the first four days, one of which was above list.

[corktownyuppie]

The real estate market in the city is a totally inefficient market. I just bought a place that is literally 2 houses on the wrong side of one of Indian Village's borders. No blight on the block. Bought it for 35k. Put 5k of superficial repairs [[paint, flooring, etc.). All in for 40k. It rents for $800/mo. to a family that makes $48,000 per year that has lived on that block for over 20 years. My next door neighbor has lived in the the house next door since the 1960s, though I don't know when he purchased it. He's pushing 75 years old.

I literally have no explanation, other than this: I thought I bought it for a steal. Turned out the guy who sold it to me bought at tax auction for under $1,000 back during the 2008 crash.