Daily Real Estate News March 18, 2009
Home prices in the Detroit area have cratered, creating opportunities for investors who are snapping up property to renovate and flip or just rent out.
Jeremy Burgess is typical. He started his company Urban Detroit Wholesalers in 2007 with partner Jared Pomranky. They buy houses for a few thousand dollars or less because owners who are leaving the area want to get rid of the tax burden and liability. Burgess and Pomranky look for homes in working-class neighborhoods on the outskirts of the city. They do a little fix-up and painting, and then sell the homes to out-of-state investors for an average of $35,000. Local investors, they say, have a hard time seeing the opportunities, Burgess says.
Burgess claims he averages a 12 percent to 20 percent return on investment. He believes home prices will go back up once financing is easier to get. "This last drop I think is totally due to lack of financing options, and when cash is king, prices drop significantly. I see it as an artificial drop in value, and I am obviously taking advantage of it. So are my investors," Burgess says.
Source: CNN, Tristan Smith (03/17/2009)
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2 comments:
We don't buy our houses for a couple of thousand dollars and we don't sell them for $35,000. Your information is incorrect and was not in the original article you quote.
Areas where you purchase properties for a couple of thousand dollars are not great areas in the City and we don't recommend people investing in those areas.
Our properties at all in for around $35,000 (purchase + rehab). We don't make as much per property as what you're stating or what the article stated.
Jared Pomranky
I have published Jared's comment, well, because he's entitled to it, however, I simply clipped this article, word-for-word and made NO Changes or edits to it whatever. I make no representation as to its validity and have presented it smply for the value it may or may not represent to a reader.
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