Detroit's Real Estate Revival: How A $2,000 Home Purchase Led To Investment Empire

Chase Hunter embarked on a unique real estate journey, beginning with a simple Google search for "best places to buy cheap properties."

Living in Houston then, she was intrigued by investing in real estate on a budget. Her search led her to Detroit, a city known for its affordable housing options.

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The Detroit Land Bank Authority, a government agency, was selling vacant properties "as is" for as little as $1,000. Despite her initial hesitation, Hunter decided to invest in the Motor City.

"I closed on my first two properties the same day in June of 2021," she told Realtor.com. "The day I closed was my very first time in Detroit."

Hunter's initial investments were modest, with her first property costing $2,000 and the second $1,800. Over time, she expanded her portfolio to include eight Detroit homes. One of the properties is her office, while the others are renovated and rented out.

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Recognizing the importance of firsthand knowledge, Hunter relocated to Detroit last year to be closer to her investments.

"The market can be a challenge to navigate if you aren't here every day," she said. "Buyers have to know the culture of Detroit to understand how to invest here."

Hunter's enthusiasm for the Detroit market led her to become a real estate agent 10 months ago. Now, she is taking her passion further by launching a real estate investment group to guide others through buying and rehabilitating Detroit homes.

"Investors come to Detroit from all corners of the country because the market is like no other," Hunter said.

Detroit's history includes a significant setback in 2013 when it filed for bankruptcy, the largest municipal bankruptcy in U.S. history. However, the city has since staged a remarkable comeback, earning the title of "America's most unlikely real estate boomtown" from The Wall Street Journal.

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The housing market reached a low point in 2009, with a median sale price of $58,900. Since then, prices have risen steadily, reaching $217,000 in 2023 – an increase of 113.3% compared to a decade earlier.

"Buyers, including investors, took advantage of low home prices in the area over the last decade, bringing energy and funds into the city," Realtor.com senior economic research analyst Hannah Jones said.

According to May data, Detroit’s median sales price reached $250,000, a 10.5% increase from the previous year. However, Jones emphasizes that even with this significant price growth, Detroit's median sales price remains considerably lower than the national average.

Nationwide, the median listing price in May was $439,950.

Detroit's resurgence has captured the attention of filmmakers and television producers. Documentaries like "Gradually, Then Suddenly: The Bankruptcy of Detroit" delve into the city's history, decline and subsequent revival. Reality TV shows like HGTV's "Bargain Block" have also showcased Detroit's transformation, following real estate investors as they revitalize abandoned properties into modern homes.

Despite its affordability, investing in Detroit real estate is challenging. Many properties come with additional costs, such as back taxes or the need for extensive renovations.

Hunter's experience illustrates this point. Although her first property cost only $2,000, she invested $85,000 in renovations to make it suitable for renters. Similarly, her $1,800 property, which she converted into her office, required $130,000 in renovations because of water line issues.

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Learning from these initial projects, Hunter now focuses on purchasing properties that require less upfront investment, ultimately saving money on future renovations. She usually spends $5,000 to $10,000 on renovations now.

"I used to buy major rehabs that I'd have to repair from roof to basement, but at this point, I focus on things that I can turn over pretty quickly such as cosmetic rehabs," she said. "I look for homes in the $80,000 range because you spend less on repairs."

Before making an offer on a Detroit investment property, Hunter assesses the structure's potential, considering factors such as square footage, location and estimated repair costs.

Hunter primarily uses business credit cards to finance repairs and renovations. She conducts thorough research and due diligence to ensure she works with reliable professionals when selecting contractors.

"People will try to take advantage of you, especially if they know you don't live here," she said.

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