Purchasing Rental in Detroit, advice?
Hi all, I'm looking to purchase a rental in Detroit. It's in the 48238 zipcode, close to the University District and Marygrove College. It's a 3/1, 1400 sq feet and renovated. It's about $35k, all brick, no central A/C. It has a renter, but don't know much about the renter. The renter is paying $750/mo.
Couple questions:
- Does anyone know that zip code, is it a good zip code to invest in in Detroit?
- The seller asked that I not speak with the renter prior to purchase, this seems to be a red flag to me, thoughts? She said that it might spook the renter?
Any thoughts in general on Detroit? I feel like a classic American city like Detroit revitalizes, but it could just be a media story. Anybody "on the ground" investors with thoughts? Thanks in advance.
Originally posted by @Kyle Manduch:
@Darren Wendroff - When making a trip up here, I would take a look at the map and take a look at the "hot" neighborhoods as specified above. There are specific reasons for each of these neighborhoods to be hot, such as money being pumped in from Quicken Loans, Federal Money, or have been hot for the last decade. I would tend to look at spillover areas. These are areas that are next to these neighborhoods which you can find some really good deals. For example, if you were looking at Corktown, which is a really hot neighborhood, I would look at North Corktown, Core City, Hubbard Farms, Southwest Detroit even. People aren't shying away from living in these areas, if you give them a good product. I've partnered up with @Mike Carino on a few of these deals the past few years, so he has experience here as well. So far, these are where the best ROI's we have seen in the city are occurring. It's speculative, but isn't all real estate? Just my thoughts. Anyone else have experiences in such tactics?
Both of my Detroit properties(Brush Park and North End) was that method. When I bought in Brush Park in 2013 most activity was up near Warren Ave near Wayne State. Or you had Downtown. People felt it was crazy, but Brush Park will probably end up being the most expensive neighborhood in Downtown/Greater Downtown when it all shakes out. The "Hot Areas" are just crazy expensive and IDK how you can make money renting, buying at these prices. Now we are doing the North End and shockingly its been easy to get renters and at solid pricing. I'm noticing its mainly people in The "Hot Areas" been in the City 2-3 years and they decide to go into a little cheaper place. West Village is a perfect example. Its adjacent to Indian Village, near Belle Isle still only 3 miles to Downtown.way cheaper than the 7.2 Area.
But I think the next major domino to fall will be Development up Gratiot. Its just a complete disaster through the area but with it being such a major artery coming into the City for people in Macomb County it has to turn around. I grew up near City Airport so thats a ways from Downtown. But literally on Gratiot as soon as you pass Eastern Market its "Pure Detroit". Jefferson, Woodward, Grand River, Michigan Ave, all have a buffer-zone. I want to get a couple spots in that part of town, but it will be just such a rough ride because nothing is there, and its far from anything thats attracting people in terms of on foot/bike, and frankly I'll be honest I don't think its nearly as safe as some of the other ateries into the City. I mean the SMART Bus on Gratiot is known as the Heroin Express. But its the last Downtown area you can get in on the "ground-floor".
Its all speculative really, just a hunch.
My Wife and I kick ourselves daily that in 2009 there were townhomes on Woodward next to Comerica selling for 55K as high at 70K and we felt it was crazy, we bought our house in Madison Heights. NOW those same places are selling for mid-300K and command 1900-2500/mo in rent. Meanwhile our house in MH went from 50K to 88K and gets 950/mo. We missed the boat majorly on that one.
Move to Detroit.
But, seriously, you can't find enough action in Orlando? ?,
Detroit is hot...It's neighborhood by neighborhood and block by block...Bagley Sherwood Forest Rosedale Park University District and few more stable flips pending recent comps and rental market is very soild...Ranges from 500 to 1200.
@JR T. Orlando isn't bad, but there aren't really strong investment opportunities here like Detroit. Trying to just invest in something with better ROIs.
You would do worse in Detroit than you can do at home, trust me. If Orlando is good enough for Blackstone I'm sure you can manage to make it there.
Hi All! Anyone have a reco for a great property inspector in the Detroit Metro? Thanks!