🏘 Bankrupt to boomtown: Is Detroit back?

👋 Hello, Best Ever Community!

In this week’s newsletter, an unlikely city goes from bankrupt to boomtown, Joe Fairless alleviates your fear of commitments, and one investor raises a multifamily property’s value by $2.5 million. 

This week’s newsletter is brought to you by QC Capital, a leading private equity investment company specializing in the acquisition of institutional-grade multifamily and car wash assets in the southeast United States. Discover more about QC Capital here.

➡️ Plus: Want to promote your business to the Best Ever audience? Learn more below!

Here we go!

_{🗞 NO-FLUFF NEWS}
CRE HEADLINES

🚘 Next Stop, Flying Cars?: Think outfitting your parking lot to be EV-ready was a pain? Boeing plans to introduce autonomous flying taxis in Asia by 2030.

📈 Build-to-Rent Blows Up: Build-to-rent homes have hit a historical peak with 27,500 houses for rent completed last year and more than 45,400 currently under construction. 

🏭 Industrial ‘Recalibrates’: Industrial users in the U.S. slammed the brakes on leasing in Q1, deepening a slowdown that’s likely to continue as net absorption has dropped 70% YoY, driving the vacancy rate up to 6.7% from 4.5%.

📉 CRE Borrowing Stalls: Total CRE mortgage borrowing and lending is estimated to have totaled $429 billion in 2023, a 47% decrease from $816 billion in 2022, and a 52% decrease from the record $891 billion in 2021.

🏥 Outpatient Is In: Demographic trends, technology, and reimbursement changes are continuing the shift toward outpatient medical care, driving increased demand for outpatient buildings.

_{⭐️ TOP STORY}
AMERICA’S MOST UNLIKELY CRE BOOMTOWN

Nearly a decade since declaring bankruptcy, Detroit is now making headlines for its revitalization. After decades of decline, Detroit's home prices have surged 40% since 2020 and saw the steepest rise among major U.S. metropolitan areas last fall. Not to mention, the NFL draft kicks off in the city today — another undeniable indicator of its resurgence. Here, we’ll take a look at the factors that have helped reverse Detroit’s real estate doom loop.

🙏 Large-scale Investments From Key Players: Detroit native and billionaire Dan Gilbert, co-founder of Rocket Mortgage, is constructing the city’s second-tallest skyscraper, topping at 681 feet. Inspired by Gilbert, others are investing heavily in downtown real estate. Ford, for example, is spending over $900 million to redevelop Michigan Central and surrounding properties, with part of the project already housing more than 90 startups.

🔀 Converting Empty Buildings to Mixed-Use: Detroit's abundance of century-old, architecturally beautiful yet empty buildings presented a unique opportunity for apartment conversions. Gilbert’s real-estate venture, Bedrock Detroit, has recently taken on the challenge, completing conversions like the $400 million transformation of the 38-story Book Tower into a mixed-use space.

💥 The "Big Bang” Approach: Gilbert's companies acquired over 130 properties downtown, investing billions. He refers to his real-estate development strategy as the "big bang approach," recognizing that downtown required apartments, retail, and modern office space simultaneously. Low rents have also pushed developers to diversify with casinos, sports venues, and theaters.

💰 Tax Incentives: Detroit's bankruptcy and reports of its decline prompted the city and state to offer generous tax incentives to developers. Although often debated, these tax breaks are crucial in Detroit because low rental rates make projects financially unattainable without them. The popular Michigan Central project, for example, is expected to receive over $200 million in tax incentives.

💬 “Sure, Detroit has social challenges that will take a lifetime to change, but you can't address [those challenges] without the resources to confront them,” one commenter said. “And that is what this redevelopment enables. It has … enabled the city to become fiscally profitable and able to reinvest in itself and its institutions.”

_{🚘 QC CAPITAL}
QC CAPITAL’S STRATEGIC ENTRY INTO A $35B MARKET

Attention accredited investors! Are you ready to take your investment portfolio to the next level? Introducing QC Capital’s exclusive QC Car Wash Fund — your pathway to high cash flow and remarkable tax benefits.

With QC Capital’s Car Wash Fund, you can anticipate:

✅ Steady Cash Flow: Experience the benefits of a lucrative business model with consistent cash flow, ensuring stable returns on your investment. Earn up to 12% annual cash flow.

✅ Exceptional Tax Benefits: Maximize your tax advantages with QC Capital’s strategic investment structure.

✅ Proven Expertise: Rest assured knowing your investment is backed by a track record of successful projects.

✅ Diversification: Your investment contributes to a diversified portfolio of car wash ventures, spreading the risk of your portfolio and investment.

But wait, there's more! QC Capital’s recent adjustments bring enhanced benefits to their investors. Under the new arrangement, Class B investors revel in an attractive 80/20 split during exit or sale events.

Don't miss out on this opportunity to diversify your portfolio and secure your spot! Learn more here.

_{✍️ BEST EVER BLOG}
FROM JOE FAIRLESS

There are three main steps to take an apartment deal from contract to close. First, the apartment syndicator performs detailed due diligence to confirm or update the underwriting assumptions. Next, they secure a loan to finance the deal. The last step happens when the syndicator secures financial commitments from passive investors to fund the deal by taking the following steps. 

📦 Create an Investment Package: The form of and the information included in an investment package can vary, but at the very least, it should include the main highlights of the deal that are relevant to the passive investor.

📬 Notify Passive Investors: Notify passive investors about the new opportunity via an email that includes the top two to three highlights of the deal, a link to the investment package, and an invitation to a conference call.

☎️ Host a New Investment Offering Call: A few days to a few weeks after sending the notification email, host a new investment offering conference call to provide details about the deal, the market, and the team.

🔒 Secure Commitments: A good strategy is to send emails to your investor database every week or two, inviting them to invest in the deal and providing them with a new piece of positive information. 

✍️ Complete Required Documentation: Passive investors make their investments official by reviewing and signing the required documentation. 

👉 Discover more details on securing passive investor commitments here.

_{🏠 DEAL BREAKDOWN}
$2.5M PROPERTY VALUE INCREASE IN 3 MONTHS

Farris Gosea saw a $2.5 million increase in property value on this multifamily deal in just three months. Here's how he did it. 👇

🏢 Property Details: 106-unit, Class B property purchased in November 2023 in Niles, MI at 100% occupancy. 

💸 Finances: Purchase price was $6.7 million net to seller. 

💵 Debt Structure: Local lender, 85/15 LTV.  

💼 Business Plan: No renovation needed; increased rents by an average of $350 per unit.  

🍾 Results: The property is currently valued at $9.2 million. Cash-on-cash for year 1 is 16% and year 2 is 27%. Farris plans to refinance in two years on agency debt with a lower rate and IO piece on a 10-year term. The IRR is 210% per year after refinance. 

If you have a deal you'd like us to feature, share it with us!

_{🌎 BEST EVER CONFERENCE 2025}
2025 PRESALE EXTENDED

Due to overwhelming demand, we opened up 50 more presale tickets to the 2025 Best Ever Conference. (This is the lowest price you'll see... guaranteed.)

We'll be back in Salt Lake City from March 4–6 for three days of sharing insights and forming life-changing relationships. If you’re a passive investor looking for data-backed opportunities and the chance to vet sponsors in person, or a sponsor looking to raise money for your deals, you need to be there. 

So STOP what you're doing and secure your ticket before they sell out... again.

Then, go share with your friends — it's more fun when you elevate together!

P.S. Want to hear what others are saying about this year’s event? Check out #besteverconference on Instagram and LinkedIn.

_{🏆 REFERRAL PROGRAM}
SHARE BEST EVER AND WIN BIG!

Want to promote your business to the Best Ever audience? Here’s your chance! This month, by referring new subscribers to the Best Ever newsletter, you can earn a chance to win a branded blog post on our website, a dedicated branded email, or even be a guest host on the Best Ever Show!*

*Featured content and guest hosts subject to approval.

Use the “Click to Share” button below to get started! 👇

🙏 Thanks for reading!

Let’s keep in touch! If you received this newsletter from someone else, feel free to subscribe here. We’re also on LinkedIn, Instagram, and YouTube.

Hope you have a Best Ever rest of your week!

—Joe Fairless