business

Investing
In Detroit
Real Estate

Brent Maxwell inspires Israelis to build
up the Motor City.

LYNNE GOLODNER SPECIAL TO THE JEWISH NEWS

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August 16 • 2018

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rent Maxwell has always
believed in Detroit’s poten-
tial. Even when world media
portrayed the Motor City as a dying
enclave, he knew it would one day
come back in a big way.
The managing director of IPS
Realty, a real estate investment firm
focused on Detroit neighborhoods,
persevered even through the recent
recession. Today, his company buys
single-family homes, multi-family
apartment buildings and whole
residential blocks in need of rebirth,
thanks to the support and resources
of investors from around the world,
including five different groups of
investors from Israel.
“Local Jews built Detroit,” says
Maxwell, whose father came
from Jewish roots. Indian Village
residents, Maxwell and his family
celebrate Jewish holidays and do
Tashlich on Belle Isle every year.
“Israelis like Detroit because it’s a
big city. They have friends and fam-
ily here, and the investment oppor-
tunities for a city with a rich Jewish
history are vast. The returns they
can realize here they could not find
in Israel today.”
Indeed, Jeremy Cronin, one of
Maxwell’s investors, originally from
Herzliya, Israel, says, “The potential
upside in Detroit is pretty big. It’s
a big step to invest in properties in
the U.S. for someone who’s not living
there. The challenge is in actually
managing the property, especially if
it’s a rental. It’s essential for anyone
who decides to make an investment
in the area to find someone on the
ground who can take care of every-
thing.”
That’s where Maxwell comes in.
He corrals a group of investors to
pony up to support a purchase of
properties. Once they are acquired,
Maxwell’s company rehabs those
in need of it and either finds ten-
ants and handles management or
sells the appreciated properties for
a profit. IPS investors typically see

returns between 10 percent and 20
percent, Maxwell says.
IPS investors do not just come
from abroad. Maxwell says he’s
pulling in people from near and
far, including Oakland County. The
draw is both the potential for return
on investment and a passion for
rebuilding Detroit.
“There’s some serious apprecia-
tion going on in areas of Detroit,”
Maxwell says. “If you don’t sell,
you don’t realize that. The income
potential is strong.”
The Israelis who invest with IPS
“love the appreciation potential,
and everyone who comes here falls
in love with the city,” Maxwell says.
In Israel today, real estate invest-
ment is a high-stakes, high-cost
game. Comparing it to Los Angeles,
Maxwell says in Israel, “you can buy
real estate for appreciation, but not
for income.”
The Israelis who invest with
Maxwell are great partners, he says.
“The professionalism, the lack of
drama, the straight answers to ques-
tions, the business-like mindset —
my experience working with Israelis
is that they’re all business and easy
to deal with. It makes for a fluid and
fruitful collaboration.”
That said, real estate investment
is not for the faint of heart, Maxwell
cautions. If you want to get in on the
action, “you have to have a high-risk
tolerance,” he notes.
“Any time you’re dealing with
returns in the double digits, it’s con-
sidered high-risk, so make it a small-
er part of your portfolio,” he recom-
mends. “I would suggest investing
either in larger, multi-family projects
or multiple properties. If you’re
investing in a single property or just
getting started, start in B+ neighbor-
hoods that are almost entirely gen-
trified. Ailing neighborhoods can be
more challenging — it takes a lot to
come to fruition. It’s not novice play.
Partner with someone who knows
what they’re doing for sure.” •