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Money D3 Article

Money D3 Article

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Published by Desiree Cooper

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Published by: Desiree Cooper on Nov 03, 2010
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10/22/2014

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By
GEORGE
MANNES
IcHARD
AND eAMELA
MAcK
are
making
a
bigbet
on
the
future
of
Detroit:
They've
just
purchased
a
hugehouse
in
a
city
that's
been
hol-lowedout
by
the Great
Recession and
the near death
of
the
American
auto industry.
One
in
10
homes
here
stands
vacant,
accordingto
Data
DrivenDetroit,
and
unemplo;rment
in
the
metro
area is
at
a
staggering
15%,
reports
the Bureau
of
Labor
Statistics.
Some
would
say
it's
crazy
tobuy
properbyin
thiscity
right
now,
but
a
good
value investment
always looks
like
a
bad
idea
tomost
people.
That's
what
makes
it
a
value.
For thepast year
MONEY
and
its
sister
Time
Inc.
magazineshave
chronicled
how
Detroiters
likethe Macks
are coping
with
what's happened in
and
around
their
hometown. Thestories
are
different,but what'suniversal
is
that
while
Detroit may
have become
a
synon)nn
for
economic
decline, those
wholive
and
work
in
theareadon't
have
the option
of
standingby
idly.
On
thefollowing
pages
you'll
meet
people
from
the
Motor
City
and
its environswhofound
that to
move
forward,
theyhadto take calculated
risks-switching
careers,
starting
a
business,even
moving
away.
You may have
encounteredsimila4
if
less
daunting
challenges in
the
recession
and
so-called recovery,
oryou
may
well indeed downthe
line.
Thesmart,
realisticstrate-
gies
laid out here
can helpyou getgoing
when
your
personal
economygets
tough.
-)
M0NEYNovember2010Photographs by
ERIC
0GDEN
 
I
:l
rl
ti
The
Big Decision
She's
Starting
a
Business
>
Paula Batchelor,
entrepreneur
When
Paula
Batchelor
took
a
buyout
last
year-figuring
she
was
likelyto
be
laid
off
if
she
didn't-she
wasn't
wor-
ried
about
landinganother
gig.
Having worked
l1
years
asa
graphic-design
project
manager
for
a
healthinsurance
company
downtown,
"I
knew
I
hadskills,"
shesays.
But
Batchelor,
a
single
mother
of
a
6-year-old,
quickly
realized
justwhat
it
meant tolive
in
one of
theworst
job
markets
in the country.
Byyear's
end,
the
resident
of
Royal
Oak-a
suburb
north
of
the
city-still
had
no
work
and
couldn't
make
her mortgagepayment.
"I
was
feeling thepressure,"
says
Batchelor, who'snow
55.
Months
of
financialstruggle
followed. Then, in June,
her
older
siste4,
Karen,
an
attorneywho'dgone
into
life
coaching
had
a
proposal.
She'd
used socialmedia,
including
Facebook,
tomarkether
own biz; Paulahad
skills
in
project
manage-
ment
and
graphic
design.
Whynotcombine
their talents
and
help
smallbusinesses
with
social-media
marketing?The
firm
theyfounded,Color
Me
Social, had
$1,500
in
sales
in
August,
a
promisingif
modest,
start. While
themoney
isn't
coming
in
fast enough
for
Paula
to
save
her
home
from
foreclosure-she
and her
daughter
are
moving
in
with
Karen-Paula
is
hopeful
that
this
is
the
beginningofher
turnaround.
"Youhave
to stickyour
neck out andtake
a
chance,"
she says.
Howto
Make
ltWork
>
Beware
the
first
idea.
Startup activityin
2009was
at
its
highest level
since
the late
'90s-no
doubt
because
so
many
people
were untethered from
regularjobs.
But
novice
entre-
preneurs
face
fierce odds: Only
halfofnew
businesses
survive
five
years,
reports the
Small
Business
Administration.
And
companiesbegun
byunemployed
people,
whoare scram-
bling for
a
quick
idea, have
dimmer
prospects.
Whether
you'relooking
for
a
sideline or
a
full-time
business,
know
that
"the
ideas
you
can easily come
up
with
are
themostIikelyto
fail,"
warnsScott
Shane,
author of
The
lllusions
of
Entrepreneurshrp.
That's
because
entrepreneurs
oft,en
start
with what
they
want
to
do,
rather
than what
people
want
to
buy,hesays.
The
Batchelor
sisters were
unusual
in
that
their
ideacame
out
of
a
market
need:
Karen
was
inspired
after
having
been
bombarded
with
questions
fromfriends
who
wantedto
use social media
in
their
businesses
butdidn't
know
how.
>
Leverage
whatyou
know.
"Experience
is
the
most
important
asset
you
have
to
have,"
says
Mel
Ettenson,
a
counselorat
the
Detroit
chapterof
SCORE,
a
volunteer
organization
that
assists
smallbusinesses. Between Karen'sexperience
marketing
her
coachingbusiness
and
Paula's
work
in
project
management,
the
Batchelors
thinktheyhave
the
right
skills.
But
ifyour
ideais
not in
an
area in
which
youhaveexpertise,
moonlight
in
the field or take
a
class
that
will
introduce
you
to
it.
>
Focus
onprocessas much as
product,
Manywould-be
en-
trepreneurs
getcaught
upin
fantasiesof
their
product
or service,
says
Ettenson.
"Butto
convert
a
dream
into
a
profitable
business,you
must
have
a
plan,"
hesays.
In
otherwords,
even
if
youbake
theworld'sgreatest pastries, youwon't
be
able
to
make
a
viable
business of
it
if
you
haven't
figured out
how
to
manufacture,
deliver, and sell them.
Mindful
of
this,
Paulaand
her sister
thought
early
on
aboutwhat back-office
systems
they'd
need
to efficiently
handle
product
management,
billing
and
other
essential tasks.
TheBig Decision
They're Making
a
Value
lnvestment
>
Richardand PamelaMack,
attorneys
Thereal
estate
crash
has
been
tough
on
Richard
and
Pa-
mela Mack.
Their
condo
overlooking the
Detroit
River-
where
Pamela
lived before
they
married-was
appraised
at
$80,000
in 2003.
Now the
apartment,
which
they're
rent-
ing
out,
is
worth
closer
to
$25,000,
based on asking
pricesfor other units in thebuilding.
The
house
they've been
liv-ing
in-a
four-bedroom inthe
upscale
University
District
they bought
for
$200,000
in
2003-is
around the cornerfrom similar-size
houses
listed for
$100,000
or
less.
The decline in
their
properby
valuesis
hardly
unusual
for
the
city.
What
rs
surprising
is
the fact
that
the Macks
arebuying another
house.Over thepast
yea4,
the
two attorneys,
who have
a
2-year-old
son,
havemadeoffers
on
17
properiies.
Finally,
this
Septemberthey
closedon
a
six-bedroom
home.
The
1925
Tudor-style inthe
historic
Palmer Woods neigh-borhoodhad sold
for
over$500,000
in
2005,
but
it
costthe
Macks
just
$114,000
in
a
foreclosure
sale.
Their
plan:Movein,
rent
out
theirUniversityDistrict
homealong
with
the condo,
and
in
20
yearshave
a
real
estate nest
egg
for retirement.
"I
get
to support the citythat
I
love
and
be
a
part
of
a
very
good
investment,"
says
Richard."It'swin-win."
Howto
Make
ltWork
>
Have
a
margin
of
safety.
The
Macks'invest-
mententails
plenty
of
risks.
Although
their
houselooks
like
a
bargain, there's
no
guar-
antee
that
real
estate
prices
will
rebound-ora
what
>
Thi
tateretu
from
ers
anyti
hood,1
ham,
if
they
if
they
ASSIGNMENT
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