Investors in Detroit have noticed for a couple of years European investors coming to the market for great bargains on investment real estate. It seems that 2009 is no exception as we have seen more European investors than ever purchasing cash flow investment properties. Whenever I tell someone this they invariably ask me why because many of them aren’t involved in real estate at all or they pretty much think that investing in real estate is the same here as everywhere.

Detroit real estate offers excellent bargains that are very difficult to find in the rest of the world. Our price points are very low (around $40,000 for purchase and rehab) and these properties still rent out for $850-$950 a month. It doesn’t take a genius to figure out that’s good for cash flow. If you add into that the weak dollar, which gives European investors another discount when purchasing our properties with the conversion from Euros.

Most of the European investors we talk to are investing for the cash on cash return and for the long term prospects of the investment. Unlike many U.S. investors, they aren’t looking for the “get rich quick” investment and are willing to invest in a solid property for the long term. This is going back to the way real estate investing used to be and I think it’s a great model. With Detroit foreclosures you get the best of both worlds. Monthly cash flow for a good cash on cash return and purchasing at 50% of the actual value of the house, which means great long term (10 years) prospects for value.

While there are some exception, for the most part European investor are finding successful real estate investors from Detroit so they can leverage their experience on how to create successful investment properties. Real estate investing is different than it is in Europe and Detroit is different than the rest of the United States or even Michigan. There are specifics in Detroit properties to watch out for like water, taxes, neighborhoods, specific streets, City requirements, ordinances, and other items. Working with a reputable Detroit real estate company will ensure that you know how to navigate through these. A good place for foreign investors to get more information is at our Detroit Real Estate International Questions page.

Our experience has been that more and more investors are coming to Detroit as it’s a great return on investment that doesn’t require a million dollars of investment capital. We have sold properties and made successful investors of European investors from England, Ireland, Scotland, Germany, France, and many other European countries. If you’re interested in investing check out our Detroit Real Estate site or leave a comment.

Jared Pomranky
Detroit Market Expert