The Dirty Truth About Detroit Property Taxes
/This is my story of taking on a corrupt mayor’s henchmen, how a racist helped my cause, winning and losing and winning, and how our new mayor has turned the city around.
My first Lose — My Own Ignorance
The House on Lakepointe we bought in 2009 for $10,000.
My husband and I were new to investing in Detroit. We only had a few houses so far in 2009 and we were high on success. We bought them starting in 2007 as the city was on its way to bankruptcy. We renovated them, rented them out, and we were making great money. When we bought our next house in 2009 for $10,000 on Lakepointe Street, we didn’t notice how inflated the taxes were. Then once we bought it and it was uncapped, the taxes went up even more and were close to $5,000 a year.
WHAT??
My Second Lose — Me Against the Mayor’s Henchmen
Have you ever heard of Mayor Kwame Kilpatrick? He’s now in jail and he’s the star of his own episode on American Greed. I didn’t know he was such a criminal then and it seemed everyone in the city was part of his criminal activity. So I went ahead and argued my tax assessment before the Property Assessment Board of Review. I thought I came in well prepared with sales comparables. But when it was their assessor’s turn to talk, I had no idea what she was saying. I asked clarifying questions to which she refused to answer and the whole board had a good chuckle at my expense. I lost my tax appeal. I left that meeting and acquired a real estate license.
My First Win — The Racist Helped Me
My husband, Patrick, and I in 2020, now older and wiser than when we bought the Lakepointe house.
I appealed the decision in Detroit and took it to the State level. The magistrate was a beautiful Persian looking woman. I barely made my case, strictly based on comparable values in the area, when the representative for Detroit interrupted me and said, “Girl, you don’t know ANYTHING about Detroit.” I took that to mean because I’m Caucasian. But she didn’t bother to find out that my husband/business partner grew up in Detroit and indeed knows Detroit neighborhoods and their values.
The Detroit Defendant stated, “There’s nothing wrong with the Lakepointe neighborhood. I grew up in what’s called Little Beirut where I heard gunshots every day. Those ‘Aye-Rabs’ would burn down their own houses because they owned the insurance companies. They got rich doing that. Your house is a $60,000 house all day long. So your taxes are correct.”
The magistrate ruled in my favor.
My Third Lose Then Second Win — It’s Who You Know!
I took the legal decision from the State back to Detroit and asked for a new tax bill. DENIED. I asked for a supervisor. DENIED.
Then I met a full-time tax appealer. He knew people. He took my whole portfolio for $750/property and he was able to get all my taxes reduced to half their current rate. Still too high on Lakepointe, but great for our other investments.
My Final Win — The New Mayor Who is Saving Detroit
The best new mayor, Mike Duggan, came into office in 2013. He had all the properties assessed more fairly and changed everyone’s property taxes. The taxes on Lakepointe are now $1,222.27. I could sell the Lakepointe house now for close to $50k.
Mayor Duggan has been improving Detroit top to bottom ever since. He brought in big tech companies (Google, Amazon, Microsoft, LinkedIn, Twitter, Pinterest). He improved city services. He helped homeowners keep their properties from tax foreclosures. His State of the City addresses are inspiring. And we’ve seen the prices of houses increase. Within the last year, the cost of houses in Detroit has increased by 7.7%.
Detroit is a Come Back City! We still buy around two properties a month, renovate them, place a tenant, and now we sell them to investors worldwide. Our investors are earning a 12–14% ROI.
And the best part, I doubt I will ever have to appear in front of a panel of criminal henchmen again!