Why Canadian Investors Are Buying Detroit Real Estate |

More Canadian investors are calling about buying properties in the United States than in Canada right now. That’s not a typo – cross-border investing has become that popular.

Tom McCormick, a Canadian engineer turned real estate investor, made the jump from Windsor to Detroit. His story shows exactly why so many Canadians are looking south for their next deal.

Why Detroit Makes Sense for Canadian Investors

Tom has been working in the U.S. since 2017, which gave him a huge advantage. He already had a Social Security Number, U.S. bank accounts, and a growing credit history. But the real kicker? The numbers just work better.

Here’s what makes Detroit attractive:

Properties cost about two-thirds of what you’d pay in comparable Canadian areas
Lower taxes than Canada
Landlord laws that actually protect landlords
Better Cash Flow – you can actually get close to the 1% rule
Currency advantage when the Canadian dollar is weak

Tom put it simply: crossing the border for work felt like getting the best raise ever. That same advantage applies to real estate.

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The Detroit Flip: A Real Example

Tom’s current project shows exactly how the numbers work. He bought a property in Detroit’s North End for $75,000 USD. The area is about 10 minutes north of downtown, and it’s improving.

The house needed serious work – around $100,000 in renovations. That includes:

Structural repairs to fix sagging floors ($15,000 alone)
Complete electrical rewiring
Adding a full bathroom
Converting to 4 bedrooms, 3 bathrooms
Opening up the kitchen to the living areas

After repairs, the property should sell for $260,000 to $270,000. That’s roughly $85,000 to $95,000 in profit – not bad for six months of work.

Search US mortgage records to check existing financing and ownership details on Detroit properties before you make an offer.

Now compare that to Windsor. A similar Windsor Real Estate Investment: Ontario’s Hidden Gem Market $200,000 CAD just to buy, plus all the renovation costs on top. Even with the exchange rate, Detroit comes out way ahead.

The Financing Challenge

Getting a loan for this deal wasn’t easy. The renovations cost more than the purchase price – that’s what’s called an “upside down” loan. Lenders hate these because the numbers look backwards.

Add in that Tom hadn’t finished any U.S. flips yet, and some lenders won’t touch Detroit at all, and you’ve got a tough financing situation. Most lenders want to see 3-4 completed deals before they offer their best terms.

Dealing with an upside down loan where renovation costs exceed the purchase price takes the right lender — book a free strategy call with LendCity and we’ll find cross-border financing that works for your deal.

How Tom Got Started in Real Estate

Tom bought his first property in 2020, right when COVID hit. Not the obvious time to jump into real estate, but two things pushed him to act.

First, his job in the automotive industry suddenly felt shaky. He came close to being laid off and realized his salary wasn’t guaranteed. He needed another income source.

Second, his younger brother bought a duplex near the University of Windsor. Seeing his younger sibling take action lit a fire under Tom to step up his own game.

His first deal was rough. He bought a single-family home and tried to convert it into a house hack with an additional unit. He gutted it to the studs, ran out of money, and had to learn construction work himself just to finish the project.

His dad became his first investor, providing money to complete the basement unit. That injection of capital got the property cash flowing – barely at first, but it was a start.

The experience taught Tom everything he needed to know about renovations, building codes, and working with the city. It wasn’t pretty, but failing forward gave him the confidence to tackle bigger projects.

The Partnership Model That Works

Tom doesn’t fund all his deals alone anymore. He’s developed a 50/50 partnership structure that lets him scale.

Here’s how it works: Partners provide most of the capital and take a passive role. Tom and his brother find the deals, manage the projects, handle contractors, and deal with all the corporate and tax stuff. They also contribute money to cover costs until the first construction draw comes through.

Why split it 50/50 if partners put in more cash? Because Tom believes both sides need skin in the game. When everyone has equal stakes, no one feels cheated. No one wonders if they got a raw deal. That trust matters when you want partners to invest in your next deal and the one after that.

Tom isn’t looking for one-time investors. He wants relationships that span multiple projects. That approach has opened doors to more deals than he could ever fund alone.

Tom’s 50/50 partnership model works because both sides have skin in the game — if you want to structure similar deals, book a free strategy call with us and we’ll help you get the financing piece right.

What’s Coming Next

Tom has more projects lined up. Two more flips similar to the Englewood property – $60,000 to $75,000 purchase prices, six-month timelines, quick returns.

But the bigger opportunities are the multifamily properties. Tom’s looking at eight-unit and twelve-unit buildings that need complete renovations. These are longer plays – over a year to renovate, fill with tenants, and refinance to pull capital back out.

The refinance-to-add-units strategy is key. Buy distressed, fix it up, stabilize it with good tenants, then refinance. If the numbers work right, you can pull most of your capital back out and still own a cash-flowing property that hits close to the 1% rule.

That’s nearly impossible to find in Canada these days.

Getting Over the Fear

Most Canadians are scared to invest in the U.S. They worry about entity structures, financing, property management, and dealing with a different system.

Tom gets it. The fear makes sense. But he says you don’t need perfect knowledge to start. You don’t need the fanciest corporate structure. You need to take action.

Having guides helps. Connect with investors who’ve already done deals in your target market. Find a lender who understands cross-border financing for Canadians. Build your team before you need them.

Tom had advantages – he worked in Detroit and already had U.S. banking set up. But plenty of Canadians invest in U.S. markets they’ve never lived in. The key is starting, even if you’re not perfectly prepared.

The Bottom Line

Detroit gets a bad reputation, but that’s old news. Downtown is vibrant and safe. Neighborhoods are improving. Investment activity is creating more comparable sales data, which makes US mortgage financing easier.

For Canadians, especially those in Windsor, Detroit is right there. Why not take advantage of lower prices, better landlord laws, and strategies for fixing negative cash flow on rentals?

Tom’s projects show it’s possible. His first Canadian deal was messy and barely broke even. Now he’s running multiple projects in Detroit with strong profit margins and building a portfolio that would be much harder to create in Canada.

The numbers work. The market is improving. The currency advantage helps. If you’ve been thinking about cross-border investing, it might be time to stop thinking and start doing.

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Frequently Asked Questions

Why are Canadian investors choosing Detroit over Canadian markets?

Detroit offers properties at about two-thirds the price of comparable Canadian areas, has lower taxes, more landlord-friendly laws, and better cash flow potential. The currency exchange can also work in Canadians' favor. Properties that would cost $200,000+ in Windsor can be purchased for $75,000 in similar Detroit neighborhoods.

What do I need to invest in U.S. real estate as a Canadian?

You need to set up a legal entity (usually an LLC), establish U.S. banking relationships, and build a team including a lender, real estate agent, and contractors. You don't need perfect structures to start – you can begin simply and refine as you grow. A Social Security Number helps but isn't always required depending on your investment structure.

What is an upside down loan and why does it matter?

An upside down loan is when your renovation budget exceeds the property purchase price. Lenders view these as riskier because the numbers look backwards. These loans are harder to get, require more money down, and won't qualify for the best financing terms. You'll need to plan for higher upfront capital on these deals.

How much profit can you make flipping houses in Detroit?

A typical Detroit flip might involve buying for $75,000, spending $100,000 on renovations, and selling for $260,000-$270,000. That's roughly $85,000-$95,000 in profit over about six months. Results vary by neighborhood and property condition, but the profit margins can be significantly better than comparable Canadian markets.

What's the partnership structure for U.S. real estate deals?

A common structure is a 50/50 split where partners provide most of the capital and take a passive role, while the managing partner finds deals, oversees renovations, and handles all project management. Both sides having skin in the game creates trust and alignment for multiple deals together.

Can you really achieve the 1% rule in Detroit?

On multifamily properties in Detroit, you can get close to the 1% rule (monthly rent equals 1% of purchase price). This is nearly impossible in most Canadian markets today. After buying distressed properties, renovating them, and refinancing, investors can achieve strong cash flow that hits or approaches this benchmark.

How long does a typical Detroit flip project take?

A complete gut renovation including structural work, electrical rewiring, and layout changes typically takes 4 to 4.5 months. Add another 2 months for marketing and sale (conservative estimate), and you're looking at about 6 months total from purchase to closing on the sale.

Is Detroit really safe enough to invest in?

Detroit's reputation is outdated. Downtown Detroit is vibrant and safe, and many neighborhoods are actively improving through gentrification. The key is choosing the right areas – look for C-class neighborhoods that show signs of improvement, where you're not the first investor but can still benefit from appreciation as the area continues to improve.

Disclaimer: LendCity Mortgages is a licensed mortgage brokerage, and our team includes experienced real estate investors. While we are qualified to provide mortgage-related guidance, the broader financial, tax, and legal information in this article is provided for educational purposes only and does not constitute financial planning, tax, or legal advice. For matters outside mortgage financing, we recommend consulting a Chartered Professional Accountant (CPA), licensed financial planner, or qualified legal advisor.

Written by

LendCity

Published

December 22, 2025

Reading Time

7 min read

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