New Detroit Inc

In 2010, Detroit native Dan Gilbert moved his Quicken Loans headquarters to Detroit, purchased nearly $10 billion of prime real-estate, and has dedicated most of his time to his vision for the “new” Detroit. And since he started putting his vision into action, scores of companies (with an estimated 10,000 workers) have followed his lead and moved their offices to Detroit. Dozens of companies, many of them in creative industries such as advertising, architecture and design, are flocking to central-city Detroit in a surprising reversal of the mass exodus to the suburbs that took place during the past half century. (for more detail see http://www.businessinsider.com/after-filing-bankruptcy-detroit-is-on-the-verge-of-an-epic-comeback-2013-7?op=1) Detroit is rebounding from its “depression” of a decade ago. However, real estate values in many areas of the city have yet to respond. There are a substantial number of homes, owned by banks, whose values have yet to respond to the improving economy in Detroit. (In 2010 the average price of a home was $7,500.) New Detroit will acquire homes located in neighbourhoods which are experiencing a “rebirth”. The homes must have been rehabilitated within the last 3 months and leased to Section 8 tenants or other acceptable tenants. The purchase price for the homes must be such that the net cash flow, after property taxes, management fees, insurance and a repair allowance, will yield cash returns of at least 10% per annum. The supply of vacant homes available at discount prices is substantial. In 2015 Wayne County estimates that 30,000 homes will be sold for delinquent taxes. There are a number of companies which purchase foreclosed homes or homes sold for delinquent taxes. These companies rehabilitate the homes, secure acceptable tenants and sell the leased homes.

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