Detroit has many apartment buildings (small and large) that are in need of rehabilitation, the asking prices are very low due to this. My question is this, when running numbers (on many buildings), after buying the lot/building and putting a considerable amount of money into rehabilitation (2-4x the price of the lot) it would still give you an annual return of 25%+. How risky would it be to embark on an investment journey such as this? Do you think the risk justifies the potential rewards?
Hi, depends where the apartment is located exactly, I like single family homes in Detroit a little better than apartments in Detroit mainly because the location of apartments are in really rough areas. I can find some areas in neighborhoods in Detroit that are very clean. safe, nice, for single family homes. Location will be a very important for your apartment search.
@Stossi Tsantilas same as what Jamiel says, depends on the location, I will tell you the area that I'm targeting, anything near downtown (but not downtown since it's insanely expensive!) is hot, especially close to woodward, I haven't bought apartment buildings yet so I can't give you numbers, I'm doing single family/duplex but can't imagine you having any problems getting your building fully booked with a place near downtown, I would say south of Chicago Blvd and as close to woodward as possible.
@Roy Gutierrez This is great, thanks for responding!
anytime @Stossi Tsantilas ! Any other questions feel free, not a seasoned investor (passively since '12, full time since this year, Detroit the past 6 months) but I like to share what I learn!
I am investing in SFH in Detroit.
Regardless of product you buy it will come down to the location/neighbourhood, get this wrong and you will go backwards.
Annual return of 25%+, sounds good, as long as its not smoke and mirrors.
I would want to view the leases, and look at the track record on this particular complex, income, how long tenants have been renting in this property, calibre of the tenants.
I have steered away from multi units in Detroit because I think it may be higher risk... baby steps for me. So far so good.
All the best
@MarisaRowe What would be some good areas in Detroit? I am embarrassed to say I did buy in a very wrong neighborhood there and I learned my lesson, but it also has turned me away from Detroit, but I know there is upcoming potential there. I will actually be there at the end of the month and I wanted to drive around a bit. Could you suggest some areas to check out?
@stossi tsantilas I think apartments are great for ROI. I have a lot of out of town investors looking to purchase. The key is good property management
@Hailey Brown As a realtor here. Some areas I always recommend my investors are midtown, new center, Indian village
@Gary Carver .... What’s your opinion on this: