I am a rehab contractor in the Detroit Area. I want to start doing projects in other states. Which area should I focus on. Detroit’s real estate business is still active however because of the values not being high investors are really shy about putting money into the repairs.
I intend to keep my operation going here however I would also like to test the waters somewhere else in the country…But where??
I would stick to where you live, unless you plan on moving. There are bound to be some people who need rehabbing services in your area - maybe an upper income or middle income suburb? If you move, come to Dallas - I will give you lots of businss here! LOL. But on a serious note, Houston and Dallas both are booming…the effects of the “down” economy have been very minimal here in Texas. Housing prices have been reduced some, but nothing like elsewhere.
Sorry, it doesn’t matter where you operate. People will be shy about putting money into repairs anywhere in the country. You go into a higher income area or larger city, you’ll have more competition and competing bids and immigrants to fill in the demand and bring the price down to what you’re getting now. The value of land and taxes will also be a lot higher in wealthier cities and those potential customers are going to try to haggle the price down because of the little they have left. That’s just the way the free market works and the way people are.
If you’re struggling, you need to take a course on salesmanship, not move to another city.
If you take your old pickup into the service garage and the mechanic says you need $500 in repairs and suggests some other things repairs that would send the bill up to $3,000, do you tell him to put in $3,000 in repairs or do you try to work down the $500 quote. That’s just the way most people are. The master salesman will try to convince them that they are better off spending somewhere between $500 to $3,000 and they’ll get the best value out of it.
I’ve lived in booming cities and depressed cities and it’s the same everywhere. In booming cities, I could still find people to work for less than half of what the better marketed and more persuasive guy charges if it’s simply about hourly rates. If you can’t make it in a depressed city like Detroit, you can’t make it anywhere.
Last time I was in Somerset Collection Mall in Metro Detroit, I walked to the second floor of Neiman Marcus and saw dress shirts for sale for a thousand bucks a piece. Not too far from there is the Bugatti dealership that sells million dollar Veyrons. And this is all happening in Metro Detroit. Yet Troy (a Detroit suburb) is also suffering from a huge office vacancy.
How is it that people are able to sell thousand dollar dress shirts in depressed areas that cost a couple bucks to manufacture? How is it that Somerset Mall has no retail vacancies, yet charges the highest rents and has some of the highest sales per square foot for malls in the country? You think that 99% has nothing to do with salesmanship? You think you’re going to be more successful by just moving most of your business to another area of the country? Good luck!