How Foreign Investors Can Buy Detroit Real Estate the Smart Way

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Discover how foreign nationals can invest in Detroit real estate safely and profitably. Learn how to set up your U.S. LLC, secure DSCR loans, and navigate FIRPTA taxes — plus meet the trusted Detroit team that helps global investors build cash-flowing portfolios.

Why International Investors Are Turning to Detroit

Detroit is one of the few U.S. cities where real estate investors can still find affordable properties with strong rental returns. While many coastal markets rely on appreciation alone, Detroit continues to deliver real ROI through rental income.

Most Detroit investment properties still sell for under $100,000, yet rents remain strong. This balance allows foreign investors to build income-generating portfolios — even from abroad — without the inflated prices seen in markets like Miami, Los Angeles, or New York.

Detroit’s resurgence is powered by new development, expanding downtown employers, and a growing demand for quality rental housing. For investors, it’s a rare opportunity to get in early on a city that’s rebuilding itself.

Step 1: Set Up Your U.S. Entity (LLC)

Before purchasing property, foreign investors must create a legal business structure in the U.S. — typically a Limited Liability Company (LLC).
Setting up an LLC in Michigan involves six simple steps:

  1. Choose a name for your LLC

  2. Get a Michigan-registered agent

  3. File your Articles of Organization

  4. Draft an Operating Agreement

  5. Apply for an Employer Identification Number (EIN)

  6. Open a U.S. business bank account

You can complete this process yourself or hire a professional service.
For example:

  • Notary setup service: around $300 (basic setup, no legal guidance).

  • Full setup service with banking connection: around $495, but if you deposit $10,000, you receive a $250 rebate — effectively costing $245.

  • Use a lawyer. Richard Sharpe

🖇️ Recommended resource: Michigan Registered Agent – Start an LLC

Step 2: Secure Financing with DSCR Loans

Foreign investors can qualify for DSCR (Debt Service Coverage Ratio) loans, which are based on property income rather than the borrower’s personal income or U.S. credit history.

Here’s what to know:

  • Most lenders won’t finance homes under $100,000.

  • I can connect you to the lender who will do financing under $100,000.

  • The property must appraise for at least $80,000.

  • If purchasing multiple homes, each should appraise around $50,000.

  • Interest rates are typically close to prime, with bridge loans available for fix-and-flip projects.

Bridge loans carry slightly higher rates but fewer fees — and can later convert into DSCR loans once the property stabilizes.

This structure allows international investors to build or refinance portfolios with predictable terms, even if they don’t have U.S.-based income.

Step 3: Build a Reliable Local Team

Investing remotely is only successful when you have trusted professionals on the ground.
Here’s the team I recommend (and personally work with):

  • Broker (Me): Sourcing properties and guiding negotiations

  • Pat: Finds the best investment opportunities

  • Andrew: Top-tier property manager

  • Erika: Handles title work and closings

  • Christine: Lender specializing in DSCR and bridge loans

  • Rick: Real estate attorney familiar with international transactions

Working with an experienced Detroit team protects your investment and ensures compliance with local and federal requirements.

Step 4: Understand FIRPTA — The Foreign Investor Tax Rule

When foreign nationals sell U.S. real estate, the Foreign Investment in Real Property Tax Act (FIRPTA) requires 15% of the sale price to be withheld and sent to the IRS.

The process differs depending on how your ownership is structured — whether your LLC is single-member, has a U.S. partner, or is held in a trust.

While FIRPTA can sound intimidating, it’s simply a tax compliance step that can be managed with the right guidance. Consult a tax advisor before selling any property — it can save you both time and money.

Step 5: Why Detroit Is Ideal for Global Investors

  • Low entry price point: Properties under $100K still exist.

  • Strong rental demand: Steady cash flow potential.

  • Rebuilding economy: Long-term appreciation prospects.

  • Investor-friendly laws: Michigan supports business ownership by non-residents.

  • Available financing: DSCR loans make it possible without U.S. income.

Whether you’re looking to diversify your portfolio or enter the U.S. market for the first time, Detroit offers one of the best opportunities for foreign investors seeking cash flow and equity growth.

Final Thoughts

Detroit’s market is at the sweet spot — affordable enough for new investors, but growing fast enough to reward early entrants. With the right structure, financing, and team, international investors can confidently own Detroit real estate from anywhere in the world.

If you’d like to learn more or get connected with my trusted local team, reach out through my email, Monique@greatdaypm.com, or watch my latest YouTube video where I walk you through every step visually.