Buy for renting

11 Replies

Hi. I am a British guy who has property i rent out in the UK and Ireland and i am looking to buy obviously cheap property to rent out in Detroit. I know its not what we call a plush area but i started in the UK in areas no one else wanted and have made a decent living not forgetting the odd occasion i bombed out almost literally.

What i am looking for is family homes to rent to low income families for a fair rent. I found if you look after the family they will look after you most of the time. Is this the same in Detroit? Also as being a novice to the US market any info on any do's and dont's would be appreciated from people on the ground. I realise i am an outsider and local renters will probably not be willing to help , its the same here in the UK. Hopefully if things go to plan and i get started in Detroit i can provide decent well maintained homes for low income familes at a decent price and help them. Obviously with me making some money in the process. of course. Any help ,tips or advice would be very welcoming. 

Thank Russ

@Russell Mitchell Run away.

Why not stick to what you know?  You couldn't possibly have exhausted the opportunities there.  Unless you have a very strong game plan--the types of homes you'll buy, how many, what areas, the people you will rent to, the vacancy and repairs and capex you'll experience, a strong management team on the ground, run away.  

Even if you think you do have a strong plan you better double and triple check it.

Russ, I am in the low income arena.  Not in Detroit, but in an area that also has very low employment opportunities.  You may want to read some of my blog posts to get a flavor for low income landlording in the U.S.

You obviously will need to use a property manager, and it is never too early to start researching that to find a good one.

I am interested why you chose Detroit.  The economy there has declined considerably and I am unaware of anything that I would think likely to significantly improve the economy. 

Poor economy often results in reduced population which increases vacancy.  Poor economy often leads to placing more people in each unit which increases vacancy.  

Detroit would not be high on my location to invest in RE.  

Hello @Russell Mitchell ,

Welcome to BP.

I am a foreign investor like yourself and own a few lower end properties in Detroit. I was in your position a few years ago and have learnt a fortune since staring out in Detroit. 

I can only agree with @Larry T. Detroit is a very very difficult market to do long distance. Don't get me wrong- there are people who are investing successfully in Detroit, and I have met quite a few of them- but they are all on the ground over there, very knowledgeable and very hands on and experienced. It takes far more than a property manager to succeed as an overseas investor in Detroit. To put it in a nutshell if I knew then, what I know now- I would never have invested in Detroit.

PM me if you would like more information - happy to share.

Originally posted by @Saul L. :

Hello @Russell Mitchell ,

 @Larry T. .

I offered $1275 for this house on the condition that all debts are paid (No back taxes No water bills No special assessments) The current tenant was paying $600 per month until the PM started refusing his payment about 10 months ago after it got foreclosed.

He wants to rent it for $600 until he can afford to buy it from me if I get it.  I'm betting they sell it to me when the listing expires in six days as this time of year they are trying to get rid of everything before the end of the year. As they know it wont likely sell in January if it didn't sell in August or September.

Brick and stone house with double pane windows and good roof.

I will end the year with more than 100 houses in Detroit and Detroit suburbs. And with a new goal of 400 by the end of 2016.

@Richard Dunlop My sister's brother-in-law has a bunch of houses like this in Detroit.  I couldn't believe how good they looked and how cheap they were.

You are there.  You are buying right.  You know your tenant base.  You have a strong plan.  That' the difference.

Originally posted by @Larry T.:

@Richard Dunlop My sister's brother-in-law has a bunch of houses like this in Detroit.  I couldn't believe how good they looked and how cheap they were.

You are there.  You are buying right.  You know your tenant base.  You have a strong plan.  That' the difference.

 The house can still be bought for $39,900 if you act fast before they give it to me.