Chuck’s family and mine have a lot of history together. In fact, our fathers worked together long ago at one of the Big Three automakers back when Detroit was still being called The Motor City. When the things got tough after the auto industry hightailed it out of here, knowing—and helping—each other is how we all got through it. I’m proud to say that, even though we’re all doing alright now, that bond still exists today. So, when Chuck approached me about becoming a real estate investor and asked how I find leads on Detroit investment property so easily, I told him I’d happily share what I know. After all, as far as I’m concerned, he’s family.
Where to Look for Leads on Investment Property in Detroit
To make a good living as a real estate investor, you have to be able to find great investment properties to buy, renovate, and sell or hold—again and again. Unlike the impression that some reality TV shows often give, there is rarely one deal that secures the ultimate windfall. Instead, you’ve usually got to build your returns by working hard over the longer term. A strong lead generation strategy, or several at once, is your best bet for repeatedly uncovering the deals. Luckily, here in Detroit, there are a few strategies to choose from. Here’s what I’ve tried:
Lead lists can be helpful for finding distressed homeowners who are motivated to sell as quickly as possible and they can be customized to fit almost any criteria you prefer. Through these lists, you can find individuals or families who may own vacant property as well as those in difficult financial situations and may be heading toward foreclosure. And, since foreclosure activity is up in Detroit by 6% this year, according to ATTOM Data Solutions, that could mean potentially more deals are coming down the investment pipe sooner rather than later.
But, there are several issues with leads lists that you should consider before you cough up your cash to buy them. First, since the Detroit City Council is actively working to expand programs that get homes out of foreclosure, any foreclosure activity listed could very well be inaccurate. And, all too often, the lists are generally out of date anyway. These facts don’t necessarily stop other investors from buying them, however, which can compound their uselessness and increase a homeowner’s frustration. That means, if you buy a list, you risk contacting a homeowner who’s already sold or lost their house and who’s also been hounded by multiple investors before you. That won’t get you on anyone’s good side, nor is it likely to get you a good deal. With so much investor competition, and so few opportunities to find up-to-date deals, lead lists could lead you astray.
Detroit Land Bank Authority (DLBA)
The DLBA auctions houses that are in terrible disrepair and are causing neighborhood blight. If you’re the highest bidder, you could get the opportunity to renovate a house, realize a decent ROI, and help restore local property values. The process of buying, renovating, and selling houses with the help of the DLBA may be worth it if you get a hold of a good deal.
The primary issue with relying on a program like the DLBA for leads, however, is that the process of buying and rehabbing a house is an arduous process. And, getting through all the red tape doesn’t guarantee you’ll gain a good investment or buy enough to build a solid career. You can only bid on, buy, and repair one DLBA home at a time, for example. Due to the rough shape these houses tend to be in, one property at a time could equal one property a year by the time you’re finished fixing it up. That won’t create the kind of returns you’ll need to see to survive as an investor.
The Department of Administrative Hearings
The Department of Administrative Hearings allows you to search for blight violations on its website, review the judgments against the house, and gain access to the homeowner’s contact information. This could, potentially, provide you with an opportunity to purchase the property directly from a homeowner who’s struggling to care for the house before it’s absorbed into a program like the DLBA. Bought, renovated, and sold at the right price, you might find you have a great investment property on your hands.
Unfortunately, you can only search for one property at a time online and you’ll need some details—like a case number or the address—to get access to the homeowner’s information. So, you’ll still have to do a lot of groundwork before you get the goods on the homeowner. Even then, you also risk alienating already-embarrassed and frustrated individuals and families who are probably being contacted by other investors who got a hold of the same information—especially if it ended up on a lead list. Without any guarantee that you’ll even get one deal, this method is too slow and tedious to be taken too seriously.
In the end, each of these strategies may help you find an investment opportunity from time-to-time. But, they all require an awful lot of legwork just to get you pointed in the direction of potentially good deals. Even then, the leads don’t always convert. That’s why, after giving these strategies a go, I decided to find a way to bring motivated sellers to me.
Find the Best Deals by Letting Homeowners Find You
I haven’t been a real estate investor for as long as my father worked in the auto industry but I’ve certainly been one long enough to know what works and what doesn’t for finding good leads on great investment properties in Detroit. As an independently owned and operated HomeVestors® franchisee, I benefit from the nationally-known and trusted “We Buy Ugly Houses®” advertising campaign. Because they’ve seen it on television and billboards, distressed homeowners know who to call when they need to find “solutions for ugly situations®”—and houses—fast. When they call, those qualified leads come directly to franchisees like me. So, not only do I get access to some of the best investment deals in town, I can also give my neighbors a chance to experience a positive change too. Chuck and I agree that, in our experience, that’s what our city is all about.
Change how you look for investment property in Detroit. Contact HomeVestors about joining the “We Buy Ugly Houses®” team today.
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