Most of us think of Detroit as the demolished city featured in Eminem’s music videos and aren’t surprised when we see headlines about its bankruptcy and crime. It’s easier not to think about Detroit. The collapse of Motor City hurts our American pride a little, and if we are totally honest, it’s just easier not to look anymore.
But while the rest of the country isn’t looking, a movement is quietly underway to entirely reinvent Detroit. In fact, in the coming months you will begin to read headlines about Detroit “roaring back” and how the economy is “accelerating into a new era”. Mark my words. Here are 5 reasons why Detroit is a smart investment:
1.The hipsters are on the way. The much maligned, bike riding, mustache growing hipsters are a key demographic for real estate investors to watch. Before the renaissance that made Brooklyn a destination for upper middle class New York City residents, its grungy streets were taken over by hipsters. They biked, they sang, they painted, they opened boutique coffee shops and hosted live music festivals. They started small tech firms and made empty brick buildings with concrete floors into trendy apartments. They talked about new world orders and made kale smoothies — and all the while transformed Brooklyn from a dangerous borough-to-be-avoided into the trendy $4000-for-a-two-bedroom-apartment place that it is today. Hipsters did that, and they are moving to Detroit en masse. As was reported by Venture Beat News just days ago, major venture capital firms are dumping money into young startups that are finding a home in the beleaguered city. There is still time to be an early adopter of Detroit investment, but that window will close, it’s just a matter of when.
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
2.Buy low, then do not sell. Of course we’ll want to sell eventually, but there is no rush. Detroit’s recovery is starting now. That means it has miles to climb — and many junctures along the way for us to cash in our investment. For those willing to buy and hold, the potential for returns is higher than anywhere else in the United States. Make no mistake, the city parks will be cleaned up, the fountains will be turned on, and major corporations will put their names on the city’s skyscrapers. In fact, when the Detroit Convention Center went looking for $299 million of investments to renovate its facilities, they received $922 million worth of bids within two hours. Renovations like that will multiply the value of our investments exponentially.
3.Don’t follow the crowd, follow Buffet. “I like to buy mispriced things,” Warren Buffet said during a visit last year, saying he would gladly buy a company in Detroit. The billionaire investor is well known for his uncanny ability to find bargains and then sell at the zenith of their value. If he has picked Detroit, that’s good enough for us.
4.It’s an emerging market that takes dollars. Most emerging markets are found in Asia or South America — but some describe Detroit as an emerging market as well, it just happens to take dollars. It is emerging in the sense that it is developing totally new industries and is rapidly winning investor confidence in what it can do. Already investors have spent over $1 billion to renovate tourist attractions like its Greektown Casino, downtown hotels, and restaurants. $650 million has been poured into a new sports arena and into renovating the arena district.
5.Detroit is investment friendly. To be sure, development plans will still have to go through standard city planning approval processes — but Detroit is welcoming investors with open arms. Since they made it through bankruptcy proceedings, they have taken serious steps to invite the kind of investments that we’ve already described. The culture in Detroit is one where developers and investors and the city government are working well together. We are excited about being a part of a business friendly culture like that.
While this point is not on our list of “official” reasons for investing in Detroit, we have to mention that it is a small matter of pride to be a part of the recreation of one of America’s icons. Motown has always been a part of America’s greatest successes, once being called the “Arsenal of Democracy” for its manufacturing support of the Allied powers during World War II. We want to see that city back on its feet, and we’re confident that it will be soon.