Real Life Stories From The Wayne County Auction

$700 Invested Fetches $9801 Return

This was the last house our students purchased in the 2011 auction. The property was identified by a member of our staff, who was participating in the Wayne County auction for the first time. It was a great looking house located on a tough block and we snagged it for $500 dollars. Early indications suggested that this deal was going to be a loss, as the tenants missed several appointments and wouldn’t answer our phone calls. We placed the property on the back burner and after months of non-payment we moved forward with eviction proceedings (which cost use about $200 dollars). Once we received a judgment in our favor, the tenant chased us down asking for a meeting. We ended up negotiating a lease option for 28 payments of $350/month, for a total of $9800 dollars. Once 28 on time payments have been made we’ll sell them the property for $1 dollar. They haven’t missed a payment since.

How the casinos were created 20 years ago

On August 2, 1994, Detroiters voted overwhelmingly for Riverboat and Greektown Casinos. The story leading up to the vote is historic. Between February 28th and March 15, 1994, I collected enough signatures to qualify my “Riverboat Casino Initiative” for a place on the August ballot, but I could not have done this without the homeless.  This is the story of how the homeless helped to create the commercial casino industry in Detroit.

In February 1994, something weighed heavily on my mind.  Namely, I watched the Windsor temporary casino being built from my riverfront window, and I read about the proposed off-reservation Indian casino to be built in Greektown.  The only problem was that the Canadians made it illegal to hire Americans; the Indian proposal required Indians to be hired first. This left Detroiters with only one role to play:  to bring in their money.  I was not happy about this!

On February 28th, I attended a community meeting with about 20 Optimist members at MLK High School. Dr. Sneed, former DPS Superintendent, was having a rally promoting safe streets for our kids.  There was a young elementary student that did a wonderful performance that left me in an emotional state. I left thinking, “If I do not do something, her life, and those not yet born, will be changed because Windsor and the Indian casino would suck Detroit dry.” It was that night that I decided to put an initiative on the ballot to permit commercial casinos.  I had my work cut out for me.  I had to collect 7,700 signatures by March 15, 1994 by 4:30 p.m.

I typed my own Riverboat casino petition using Greektown’s as a guideline.  I typed for 10 straight hours and created what, I thought, was a perfect petition. The initiative provided Detroit with 55% of the casino revenue tax. No other city in America had such a sharing ratio with the state.  We would use that money for community development, public safety, anti-gang, youth development and senior citizens support. The next day I printed out some copies and started getting signatures. I will never forget it. The first signature was Coleman A. Young. He was having a meeting with Don Barden at the Riverfront Café. Coleman said, “Hell, I’ll sign the damn thing. Good luck”. Don would not sign because he said, “It was site specific, and he did not support that”.

I collected several hundred signatures that day before I decided to get legal assurance that my petition was legal; that’s when I got the bad news.  My font size was wrong, the language not quite right and the petition was not pre-approved by the County Clerk.  Furthermore, it could take quite a bit of precious time to get the clerk’s approval. I only had 13 days left before March 15, 1994.

A young lawyer from Lewis and Munday, named Taylor Segue, quickly tightened up the petition.  We decided to go forward without pre-approval from the County Clerk.   For the next few days, I hired everyone I could to get signatures.   Most of those gathering signatures lasted a day and quit.  They did not have the thick skin to accept rejection or being cursed at from people upset about the idea of a casino.  I was collecting signatures for almost 18 hours a day. I would talk to anyone who would listen.  One evening Bobby “Blue” Bland was having a concert at the Fox Theater.  I began trying to get signatures from the crowd going to the concert.  Most people were rushing past to get in, and I was being ignored.  At that point out of desperation, I yelled at the top of my voice, “WILL SOMEONE PLEASE SIGN MY RIVERBOAT PETITION!!!” It worked.  I got lots of attention and lots of signatures. However, by the 8th of March I had a grim reality check:  I only had 2,200 signatures and, for sure, I was not going to get 5,500 more signatures within a week from the crowd I had helping me. They were uncomfortable with rejection.  What was I to do?

This is when history happened.

At about 1:30 P.M. a man in an old suit came up to me and asked if I needed help. I asked him if he was a registered voter and he replied “yes”, but he did not have his voter registration card in his possession.

I told him to stay close. I hired him to work, handling the west entrance of the City County Building as I handled the north entrance. We worked for several hours, and at the end of the day he made $65. He then admitted that he was homeless, and that he was going to get a good night’s sleep and a great bath for a change.  He asked if he could bring along a friend or two tomorrow.  The answer was a resounding YES!

The next day he brought two other men. The only problem was that they were not prepared to approach the public.  They smelled and needed clothing.  I took them to National Dry Goods on 12th street and bought them decent clothes. The owner/manager saw what I was doing and whispered something in the cashier’s ear. She then took 50% off the price; I nodded in appreciation. That day we collected over 50 pages or 1,000 signatures. I was beginning to feel better.

The following day I hired another six homeless people and went through the same procedure.  I was now collecting about 100 petitions a day equivalent to 2,000 signatures per day. I found out that homeless people are very smart and resilient. I recall one guy, somehow, did not get paid.  When I got home and stepped off the elevator on the 29th floor of Riverfront Towers, I was shocked to see him there asleep at my front door. He somehow figured out where I lived and got through all types of security to get paid.

On March 15, 1994 at 3:30 pm, I headed downtown to turn in more than 14,000 signatures – enough to quash any recount and qualify for a place on the August 2, 1994 ballot and a place in history.

The one other thing that impressed me about the homeless is their tenacity. Everyone else quit except them. They delivered the signatures that created the casinos. They are used to being rejected, yet they never, ever quit.

Now that it is known, perhaps casino employees and the casinos themselves will help in efforts to support the homeless.

They have earned their place in Detroit’s casino history, and the right to expect support from an industry that will not hire them, but would not exist without them.

Herb Strather

Stop crying and start buying…..

When I was a kid

In 1960, I was came home crying because I got beat up by a bully outside my front door . My mom made me shut up and go back and punch the bully in the nose as hard as I could. It succeeded! The bully grabbed his nose and went home. The next day I was famous at my school. I beat the bully.

Later in life

In 1980, before I was 30, the same thing happened. But this time, the bully was the economy. We were in a recession with 20% interest rates and I had millions borrowed out on credit. I almost got wiped out before I got started good. However, my past lessons and experience that my Mom taught me still resonated with me. I transferred my property management business and rolled up my sleeves and went to work. By 1984, I had closed more than $150 million in tax shelter deals. I made a few million in commissions and I was back in the groove. I confirmed “When the going gets tough, the tough gets going.”


The boogy man is back. This time as the greatest ever recession. The good news is that I have been to a similar movie before, so I know what to expect. We have to deal with the issues and opportunities, or they will deal with us. Today we have the chance to buy real estate for 15% on the dollars and we can make money without having cash, credit or collateral. So why are we crying? After all, the most valuable part of a real estate transaction is finding, underwriting and structuring the deal for maximum value.


Have you been crying about your house in foreclosure? Before the tears start rolling to tough, why not find out if you can buy the mortgage back for 15 cents on the dollar? Or even $500 in the case of a property tax auction.

Most foreclosures today are big blessings. It allows the occupant or the titleholder to purchase the property for the discounted price at the Sheriff sale or to bid and buy the property at a public auction for as low as $500.00. When property is bought at an auction, all of the liens and mortgages disappear, so long as you do not buy it back in the same name and accidentally cause it to become a redemption. The best advice is to take an expert with you (like yours truly).

Believe it or not

In 2011, my class bought 5 houses for less than $4,000. All the houses had homeowners that did not even bother to bid $500 to buy their own home back… go figure?

Was it because they were sleeping and did not know that they could buy their house back?

How about you? Are you acquiring assets now or sleeping through the greatest opportunities you might ever have? If the latter is true, then perhaps you should consider putting down the mop and broom, and empower yourself with real estate knowledge that will allow you to succeed.

Just go to or call 313 444.9691 for our upcoming Free Live Seminar/Webinar Saturday March 23rd, 2014 from 1:00am to 2:30pm @ Tower Center 15400 Grand River 2nd floor Detroit Michigan.

Yours Truly

Herb Strather



What is Real Estate Really Worth in Detroit?

    If you asked 10 people what a typical Detroit home is worth from a photograph, you would get 10 different answers ranging from say, $5,000 to $100,000.  Each of them would be able to justify their response. This would be the result of what we call buoyancy in the marketplace… 

    Why so much buoyancy?

    Well, there are a lot factors to this answer.  Scandals and subsequent bankruptcies have lead to thousands of foreclosures since the great recession.  The federal forgiveness programs allow for banks to sell low and then be fully reimbursed as a Quid Pro Quo for not going after homeowners who defaulted.  There is also the great Millennium migration back to Detroit, fueled by Dan Gilbert’s focus on redeveloping Detroit, which sky rocketed values. 

    On top of that, there is HUD and Fannie Mae discounting homes every day.  Fannie Mae selling at deep discounts have depreciated Detroit’s property values.    Fannie Mae and HUD seems to sell everything for 50% of what the last comps were, thus pushing prices down. Foreclosure prices on the other hand are beginning to rise, because banks are no longer getting reimbursed – THANK GOD! 

    The most starling example of this is a house on Dale Street just north of Puritan, less than 200 feet inside the city. In September 2017, a willing buyer offered $55,000 and wanted to assume an existing mortgage in the amount of $50,500 and pay $4,500 down. The bank said no, (I guess the bank thought the property was overpriced and wanted to take advantage of the reimbursement program). The bank did agree to a $25,000 short sale. Everyone was happy. Then in October, the bank asked the seller to reimburse them for the shortfall. Wow! Did something happen between September and October? I say yes. I speculate that the Trump administration terminated the bank reimbursement program at the end of the fiscal year (9/30/17) and this deal was caught in-between. Does this mean that banks will now stop shorting property values and creating artificial comps? And will HUD do the same thing and let arms- length agreements rule?  We will see…

    With all of these different factors simultaneously at play, no one in their right mind can say for sure what the hell a piece of property is worth.  I got an appraisal the other day on a 2,800 sf house on Atkinson near 12th street. The “as is” value came back as $30,000 but the after repair value (needing $35,000 in improvements) is valued at $195,000.  I now have a purchase agreement on it for $220,000 that gives the buyer a $30,000 repair credit. Go figure….. To further add to the equation, a 2,900 S,F. house around the corner on Edison is selling for $335,000. 

    So, what is the house on Atkinson really worth? You can see how there is a reasonable   answer anywhere between $30,000 and $250,000. This still doesn’t fully answer the question though. What is real estate really worth in Detroit. Let me answer it this way and you can figure this out yourself.

    I closed on a duplex on Evergreen near i-96 freeway for $65,000. The comps showed $40,000 but the buyer really wanted the deal and ignored the comps. At the closing I asked to see the appraisal and was somewhat shocked that the value was exactly $65,000. The bank said AND the title company representative confirmed “99% of the house come back for the exact sales price”. 

    So now you have your answer. The value is generally what 2 people agree on, in other words the purchase agreement rules, but only if banks and HUD get out of the way.

Protect Your Income and Assets Under New Tax Bill - Form the Perfect Family Limited Liability Company

Under the new tax bill just passed by Congress, Pass-through Entities offer a generous tax break for independent workers and entrepreneurs.  Are you an independent worker getting a 1099 instead of a W-2? Do you get paid individually or do you have a LLC that gets the checks? If the former is true, then you may not have been taking advantage of tax breaks that could of accrued to you. The new tax bill now offers even greater incentive for good structuring and tax planning. The new tax law (unless modified) will offer a maximum 29% tax rate instead of the current 39.6% tax rate; in order to take advantage of this, you have to form an entity and get paid through that entity. This makes sense anyway for balance sheet building and tax deductions with or without the new tax break. 

To put ice cream on top of the cake you might consider structuring the LLC as a Family LLC Consider these benefits;

  1. A LLC can shield you from liability in the event of a lawsuit
  2. A LLC offers you the opportunity to deduct business expenses such as automobile costs, office space in your house, lunches, clothing, etc.
  3. Profits in an LLC gives you the opportunity to value your business rather than just earn a large compensation as a 1099 service provider. To clarify, suppose you earn $120,000 a year providing computer services to a major company. The $120,000 compensation does nothing for your balance other than savings if any. Now suppose you form an LLC and let the LLC offer the services and you draw out $70,000 a year and allow the LLC to make a profit of $50,000 per year. The LLC market value at a 20% cap rate is $250,000. If you accept the funds as an individual you would only get a $50,000 balance sheet credit which is not capitalized.
  4. Income from the LLC offers a pass through tax rate of 29% versus a 39.6% tax rate as an individual.
  5. A LLC can shield you from being sued and assets confiscated. Your children can own all or the huge majority of the membership interest and you can have a Participating Promissory Note and take a % of the cash flow. 
  6. The LLC offers you flexibility when selling the business or asset. You can sell the membership interest OR the asset.

Now consider the added benefits of making it a family owned LLC. Suppose you have 2 children ages 4, 15 and say 17 and they help you in the business. Your 4 years old appears in commercials promoting your business and you teenagers actually help out with social media marketing copying and packaging and delivering the deals, etc. Say they each own 20% and you own 40%. The profits mentioned above would be allocated $10,000 to each of them and $20,000 to you. You will save tons of taxes because they are in a much lower tax bracket than you. If that is their only income there should be no taxes payable by them whatsoever while you will have to pay 29% of whatever you get.

Open Letter to the Detroit Community


We are all aware that our neighborhoods are physically challenged, and some in more serious trouble than others.  We have thousands of beautiful, vacant, brick homes on the east and west side and with a little loving care and investment these homes can be put back into service.

The question is, Who will do it…?  Will it be: The CDC’s…?  The Block Clubs…?  The Churches…?  The Realtors…?  The Developers…?  The Retirees…?  The young Entrepreneurs...?  The Community members…?  The City of Detroit redevelopment agencies…?  OR will it be the outsiders…?  How about, the answer is US!  There is no one coming to save our community.  We will have to do this ourselves or the outsiders will take over and reap the upside.  The Mayor has done great setting up wonderful redevelopment programs, but we have to do the work.  So, will we get involved in redeveloping and taking back the “D” or will we sleep through this great metamorphosis?  By the year 2020, Detroit’s housing values will more than double and that community demographics will change dramatically.  How will existing Detroiters benefit from this tsunami?  The future is in our hands.  

Consider this:

  1. Detroit has the most attractive investment opportunities in the world.  We are now post-bankruptcy with a $100 million surplus on our balance sheet.

  2. We have a “Can Do” Mayor that has already demonstrated that he can deliver quality services and create attractive redevelopment programs.

  3. We have more than 20,000 young people clamoring to move Downtown, Midtown, Jefferson East and certain Detroit neighborhoods. 

  4. Rental rates are strong, but homes values are still depressed by at least 70%.  

  5. There is a huge demand for good quality housing stock and there are thousands of vacant houses in almost every neighborhood selling for huge discounts.

  6. There are an abundance of available unemployed laborers in every community.

  7. There are dozens of churches and CDC’s in every community.

  8. There are Detroiters with money in every community.  Detroiters has more millionaires than all the Grosse Pointes combined in addition to retired managers and executives with substantial retirement accounts.

  9. Detroit has about a dozen serious developers.

The developers could not possibly do this alone, so the Block Clubs, CDC’s and Churches have to step up, and not to mention, the Pastors should be developers by definition.  This is our inventory of community power.  The good news is that it is enough to make things happen.   After all, if one man can change downtown, the rest of us 500,000 adult citizens of Detroit can take care of the neighborhoods.

If we join together, we can overcome our challenges that will enable us to successfully develop our communities.

Ok, now some of you critics will say, “Herb, how about the problems?” So to that , I admit there are challenges of course and listed are a few obvious ones along with solutions that WE together can resolve:

  1. We have to put a stop to the scrappers and thieves who are destroying our communities.  Let us support Take Back the “D” at ….or any other program available to our city with a mission to fight crime in Detroit.   Take back the “D” is a non-profit organization developed for the purpose of Community Advocacy, wherein which we currently have an opportunity for the community to get involved via the Scrapper Reward Fund.  By this fund,  we the community will help Scrappers turn in dealers who do illegal business with scrappers and thieves.  

  2. There are the several lenders and appraisal management companies that have helped suppress our values.  We have an obligation to our children and the future of our community to sue them. Take back the “D” will address this matter as well.

  3. The high cost of insurance, which can be partially resolved by communities purchasing group or blanket policies or becoming self-insured with re-insurance for catastrophic losses. Block clubs can do this on their own communities now.

  4. The educational system is daunting but collectively we can resolve this. I believe it is a marketing issue because the quality is there; however, most parents believe Charter Schools are better.  Perhaps making all schools a Charter School is a beginning, even if DPS is the sponsor until they  can find a corporate sponsor to help teach and inspire students. The sponsors could even have sub-titles under the school name (i.e. CODY High School SPONSORED BY FORD MOTOR COMPANY).  I am sure many corporations would step up and help because they want better schools and a pipeline of good students (...and loyalty to them won’t hurt).


The question is:  Are you going to help restore the “D” by advocating or investing your time and resources; or observe the restoration of the “D”, or relocate?

My primary interest is the redevelopment of Detroit’s neighborhoods.  Therefore, those that are willing to help are in high demand, and it doesn’t matter where you live.   Those that live outside of Detroit (and drive foreign cars) can still help us.  

Many people are fully committed to Detroit and would not move under any circumstances.  But a commitment to live in the City without helping is not enough.  Everybody needs to help in some manner.

For those motivated by economics consider this.   Where else can you buy real estate for $15,000, invest $5,000 and sell for $50,000 or collect $850.00 monthly rent?  Where else can you acquire an apartment building fully leveraged for $1M that is worth $1.8M? or, purchase a mortgage from a homeowner approved to short their house and receive a 100% return legally.  These scenarios should be exciting to everybody, regardless of where in the world you live.

The bottom line:  Would you consider helping to redevelop Detroit regardless of your age, where you reside, or how much money you have?  If the answer is yes, then welcome to the “Good Fight”.  Please join me at


Herb Strather, Developer and Coach


Do you know how to close on a property worth MILLIONS with NO MONEY DOWN? Ever heard of a Gift Sale?

If the answer is no, then the good news is that you can learn about it.  There is great buoyancy in the real estate market that allows for transactions to be leveraged at 100 % without exceeding normal debt coverage ratios or stretching loan-to-value ratios.  

How is this possible?  

  1. Interest rates are 4-5% and cap rates are at 9-10%.  If you know how to structure deals properly, they can be leveraged at 100 % and still enjoy a great cash flow.

  2. Rents are equal to the pre-recession numbers, yet prices are at a fraction of the previous sale prices.

Many people have lost substantial equity during the last recession, while others have watched on the sidelines afraid to jump in.  Either way, now is the time to recoup or accumulate wealth.

It is not just about the money.   Detroit needs you, and you need Detroit!

If you compare the housing market to the rebound of the auto companies, Detroit real estate is positioned for a significant rebound.   The demand for housing is greater than the existing supply.  

There are perhaps, thousands of people seeking a middle class home at an affordable price in the $75,000 range.  The problem is that there are not enough $75,000 houses on the market to buy.  Yet, there are thousands of homes selling for $25-30k that with some moderate improvements would appraise and sale for $75-90k.  Which means a couple of things for you and your community:

  1. You are in the position to buy low and sale high in the current market for a great profit!

  2. You may easily create a cash flow for yourself.

  3. You can buy a beautiful home with a monthly obligation substantially lower than you would have to pay for rent!

  4. You can become the landlord on your block, and decide who becomes your neighbors

There is so… much more!  Whether you are interested in leveraging, flipping or just investing in the “D”, you are invited to join the Strather Academy class and get involved.  Just Go to or call (313) 999-4446 to register.  Any interested parties can come sit in on our first class for FREE!


Lifetime Detroiters - We MUST get involved in developing our own Communities!

Let’s be honest, it is February 2015, and  there are no grass root movements to redevelop our neighborhoods.  If you are fortunate enough to live in the Greater Downtown, New Center, East English Village or perhaps Marygrove areas, there are numerous signs of redevelopment projects.  These few pockets of the city have experienced exponential growth and the rents have almost doubled.  However, the facts are simple:  There is a big-time demand for Downtown and its surrounding areas, yet, the average Detroit neighborhood is still devastated.   New families would not consider moving onto the average Detroit block.  To make matters worse, the banks have red-lined these neighborhoods and made it impossible to get a mortgage due to the minimum value to finance under FHA rules.

The Mayor has produced some great tools and programs through the Land Bank and DPDD, but what good is it if we are not going to jump in and find out how these programs work?

The $64 million dollar question is:  How do we redevelop our communities?   The answer?  Let’s start by looking in the mirror!  This is where you we realize that it’s up to YOU!  No one is going to do it for us.

It is hard to believe that we actually have a city with over 700,000 people in America that:

  1. Do not have a nationally recognized sit-down restaurant that you can enjoy dinner and an alcoholic beverage.


  1. Has deteriorating communities without a communicated game plan to improve them.


  1. Has over two thousand churches that operate amongst the devastation


  1. Has allowed the banks to depreciate our real estate values without suing them


Wake up Detroiters!  No one is going to save us but us.  If we do not get involved in the redevelopment of our communities, then they will not get redeveloped.  It is a disgrace to ask others to do for us what we haven’t done for ourselves.  Others provide gas stations, restaurants (Coney Islands), liquor stores and tons of automotive shops in our community.  We provide hair salons and soul food.   How long should we put up with this!

At Strather Academy we are creating the next generation of urban developers that will see to it that Detroit takes back its proper place in the world.  We are looking for interested people, churches, and Community Development Corporations that want to make it happen.

If you have a burning desire to get involved and help your community get redeveloped or if you want to purchase one of the thousands of vacant houses in Detroit and put it back into service, then you are invited to join Strather Academy . Just Go to or call (313) 999-4446 to register.  Any interested parties can come sit in on our first class for FREE!