BiggerPockets

Detroit 18% ROI

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Julia Djurasaj

Virtual Assistant from Livonia, Michigan

Jan 27 '12, 10:20 AM


Want information on how you can get up to 18% ROI on income properties in Detroit, MI?

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Nathan Emmert

Real Estate Investor from Byron Center, Michigan

Jan 27 '12, 10:23 AM
1 vote


18% ROI? I better be getting more than that to invest there! I thought 25+% cash on cash was more the norm. ROI calculations include equity... real curious how you're predicting future equity values in a place like Detroit.



David Beard

Real Estate Investor from Cincinnati, Ohio

Jan 27 '12, 10:37 AM


You're over analyzying, Nathan, I think our friend Julia is merely saying that the property in Detroit has a cap rate of 18% (I bet she's not practicing the 50% rule when she quotes that). If this is in the City of Detroit, I'd say that 18% will be very elusive indeed, due to problem tenants, high vacancies, and unpredictable taxes and municipal political environment.

Some of the suburbs of Detroit, and outlying townships, are reputedly good areas to invest. If she has 3%/mth gross-rent rehabbed properties in decent neighborhoods in the suburbs, that could be of interest to someone in that area.

That what you got, Julia?


Edited Jan 27 2012, 10:43 by David Beard


Joe Delia

Residential Real Estate Agent from Rochester Hills, Michigan

Jan 27 '12, 09:43 PM


Getting 18% in pockets in detroit isn't out of the question.



Patrick Snyder

SFR Investor from Lansing, Michigan

Jan 28 '12, 07:27 AM
1 vote


The 18% isn't the problem, it's getting good tenants. In reality, you can buy houses with a credit card (borrowed money) and put the repairs on the same card and when you get it rented, your ROI is infinite if you have no money out of pocket.

I do look forward to the day Detroit makes a comeback and everyone who bought $500 houses looks like a genius!



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