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It really started off with a boom
from my perspective, from what I've been

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looking at, it started off over
the boom of investors realizing that they can

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capitalize on buying really cheap housing.
You're listening to Carrie Lutz's Financial Survival Network,

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in today's trying times. You need
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Go to Financial Survivalnetwork dot com and
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Financial Survival Network now more than ever, And welcome. You are listening to

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watching the Financial Survival Network. I'm
your host, Carrie letz A. We're

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midway through April. The world hasn't
ended yet, but looks like we're getting

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pretty close. But in the meantime, if you've got investible funds, we've

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got a place for you to think
about that you probably never thought about before.

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You're going to be shocked when you
hear it. You're not going to

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believe Detroit, Na dare sure Reef
is with us now. Nadair, It's

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great to have you on the show. So Detroit, like you know,

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is like the last place I would
be thinking of buying a property. And

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yet things have changed there, haven't
they. Yeah for sure. Well,

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first off, thanks so much for
having me on the show. Second off,

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yeah, I would say a lot
has changed there, right. I

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mean, we were talking briefly before
this started about what makes detroitvit a viable

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or a good option for investors to
look into. I mentioned some of the

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key points being, you know,
a low entry price point, the ability

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to source deals with a good good
amount of equity, the fastest appreciation rate

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in the country right now, and
the strong returns annually from a rental perspective.

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But you know, add to the
fact of all the redevelopment going down

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on downtown, how it's stretching into
Midtown and Corktown, how certain commercial spaces

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are being tapped into on the east
and west side in certain subdivisions. Just

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got a lot going on right now. It's pretty remarkable because that city was

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given up for dead, you know. And it's funny because around the turn

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of the century, the twentieth from
the nineteenth to the twentieth century, you

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know, in the thirties forties,
Detroit was the richest city in the country.

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Wow, yeah, for sure.
Yeah, So how did all this

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happen. Well, I think it
really started off with a boom from my

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perspective, from what I've been looking
at, it started off over the boom

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of investors realizing that they became capitalize
on buying really cheap housing and providing lower

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income housing. And so when I
first stepped into the marketplace, you know,

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properties were going for like twenty thirty
thousand turn key, right, And

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so I think it it became an
option for investors that were getting price out

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of their local marketplace to start putting
their funds in assets in Detroit, real

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estate in Detroit, and I think
that just continued to drive up prices.

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And then once you know, aside
from all the redevelopment, once you know,

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you started to see news pop up
of major industries kind of looking into

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Detroit as a viable option. I
mean Google has an office downtown, Rocket

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Mortgages headquartered downtown. All these companies
are starting to look into like maybe migrating

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into Detroit. It just kind of
fueled that even more. Right, So,

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give us an idea of some of
the returns you've been the experiencing there.

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I mean, on average, the
strategy behind it is we're going into

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c class blocks, and I say
blocks because Detroit is literally a block by

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block marketplace. Right, things can
rapidly change from street A street B.

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Average price points are anywhere from eighty
five to ninety five thousand all in,

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and we're renting them from an average
of twelve hundred to thirteen hundred a month.

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Generally, after all expenses, you
can expect anywhere from about a ten

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to thirteen percent return, obviously,
not factoring in capex maintenance repairs. Kinderally

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are investors for fact twenty percent for
that. Yeah, so it sounds like

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the returns are good. How risky
is it though? Great question. I

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think a lot of people tend to
focus on the pros and try to forget

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about the cause or the risks.
It's definitely more risky than say in New

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York City or a Miami or a
Los Angeles. You know, obviously,

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when investing in real estate, you
have to be mentally prepared for the fact

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that you might run across a non
paying tenant. Another thing you need to

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run across or think about, is
you know, a lot of these homes

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are older homes, right, They're
built in the nineteen tens, thirties,

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and so Unfortunately, the values don't
allow us to do full gut renovations right

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now because the renolds would exceed the
value of the property itself, right,

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And so a lot of people are
doing mostly cosmetic updates a few mechanicals dalbinized

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plumbing, to packs, maybe an
electrical panel being spot out, And so

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you need to kind of start preparing
yourself to you know, for the first

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six months to a year after doing
your reno, you might have an increase

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in maintenance or repair calls. That's
something to keep in mind. Yeah,

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I could see that being the case. So and then, like, it's

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my perception that Detroit's not like a
tenant landlord friendly jurisdiction. Is that so?

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Yeah, I mean it's definitely more
in favor of the tenant, right,

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But like we were talking about earlier, I mean comparing it to a

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city like New York, it's definitely
more favorable, right. Average eviction to

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turn around time is anywhere from three
to four months, three months being if

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the tenant moves out on the day
a judge would order them to move out.

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In additional thirty days have to apply
for a writ and call off the

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bailiff to get out there. Right, So I can go from threedom okay,

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so cash on cash return, can
you hit into the teens for sure?

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Okay? And so it kind of
reminds me of Buffalo. Buffalo is

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a city given up for dead.
I mean, I wouldn't live there.

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The weather, it's so horrible.
But I have a lot of a lot

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of friends who live there. I
don't blame them in the least, but

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yeah, so it's a large influx
of the of people move in, you

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know, people coming from other countries. The state actually puts some money into

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meaningful places like healthcare Tesla. They
got them to open a factory there,

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although I don't think it's really ever
reached its target there. Kind of the

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same thing. It's a it's located
on Lake Erie, right, So I

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guess Detroit's with Detroit's on Lake Michigan, I guess us. But both former

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industrial cities in decline, the rust
belt, literally the epitome of the rust

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belt, and yet they've made a
turnaround. So maybe maybe this can happen

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anyplace. Huh, Yeah, I'd
say so, but I think yeah,

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I would agree with you. So
the question is is it too late for

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you to get in on the land
rush in in Detroit or is it just

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starting a great question? Well,
I gets asked a lot. I definitely

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don't think it's too late. I
mean, we are seeing a significant amount

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of increase in values. I think
last year was around eight point seven percent

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increase in property values across across the
city, which is way higher than the

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national average. However, we're still
sub a hundred k when when we're looking

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at average points. I think we
ran a graph the other week it looked

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like the average price point was around
eighty four thousand for a Turkey home let's

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say, right, so at some
point we'll exceed that on a thousand mark

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and it you know, as we
continue to increase, it gets more and

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more difficult for two reasons. Either
the rents don't follow as rabbits at a

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rapid rate and the returns start to
diminish, or you just get it out.

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But as of right now, I
think it's actually a great time to

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enter. You're not having to struggle
like a lot of us did that entered

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seven years ago or eight years ago. But you're also not paying a huge

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premium yet, right Yeah, Because
I know the real estate prices in Buffalo

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went totally gaga. There was a
lot of new construction, and is there

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a new construction going on? There
is anybody building houses in Detroit? Yet

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obviously in Metro Detroit they are in
this city itself. For Detroit proper as

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we call it, there are a
few subdivisions where you see some new construction

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popping up, but not as much
across the board. And it leads into

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the next conversation of you know,
right right now, basically for the most

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part of the city, land doesn't
have real value. You're essentially buying the

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structure on the land because it costs
too much to build relative to you know,

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what you can sell or what the
property's worth, right, and so

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at this second, it doesn't make
any financial sense to build in a lot

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of subdivisions, but there are certain
ones getting targeted for that, so you

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think that's going to happen though obviously
the prices have to go up and rents

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have to go up. What's your
average rental and what are your properties there?

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Well anywhere it can go anywhere from
eleven hundred and thirteen hundred, so

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the rents have really got up.
Huh yeah. Yeah. So when we

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started, it was like I think
like six or seven hundred dollars a month,

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and that's not too far back and
you're talking about let's five years ago.

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Is that like seven or eight hundred
dollars a month? Right? So,

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uh, what's what's the unemployment situation
like in Detroit these days? Yeah,

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so you have a lot of new
businesses opening up, and obviously as

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more companies continue to come into Detroit, it's not providing opportunity and more jobs

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in Detroit, right, Like Rocket
Mortgage has been a huge company that has

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provided a lot of jobs for people
or the locals. That's that's nice to

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hear, you know, because it
was once a great city here, and

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it's nice that it's getting a renaissance. And hey, like I said,

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if Buffalo can come back from the
brink of extinction, then so can Detroit.

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And the weather in the summer there
is really nice, isn't it?

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One of my favorite places to be
in for the summer? Winter not so

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much, but come with far right
exactly, but Michigan summers are some of

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the best summers that I've had.
Yeah, beautiful, I mean the lake

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and it's really really nice there.
So all right, so people want to

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find out more about what you're doing
there in the there and want to connect

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with you and find out more.
How do you do that? Yeah,

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easiest way is to hop onto our
website invest in upside dot com and on

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there they'll have a bunch of information, post blogs daily, they'll be able

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to read out Bond Detroit and then
obviously they can contact us through there.

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All right, Hey, appreciate you
coming on. He got a question or

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00:11:41,080 --> 00:11:45,600
comment, to just shoot us an
email kl at Carrie Loots dot com.

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00:11:46,080 --> 00:11:50,360
And while you're at the site to
take a look at our free newsletter subscribe.

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Really appreciate you coming on the there. Good luck and help make Detroit

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great again. Yeah, thanks so
much for having me, Thanks for listening

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00:12:00,600 --> 00:12:05,960
to carry Letz's Financial Survival Network your
solution to today's trying times. For the

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00:12:07,000 --> 00:12:13,120
latest, go to Financial Survivalnetwork dot
com. Financial Survival Network now more than ever,