Another one of my Deals in Detroit
Hi Everyone
I have started buying up in Detroit. The cash flow is great, but there will be a nice twist... I believe we will see growth, its already happening in some neighborhoods.
I am also seeing... like myself, out of State investors jumping into this market. Neighborhoods gentrifying... Yes, I have said it before on another post... Detroit is the come back kid.
Where in US will you get these returns?
What I am seeing on the ground is many big players investing in Detroit, the worm has turned. I will posts some links for those interested
I purchased this property for $49,900 in I would say B grade neighborhood. It was purchased prior to hitting the market, we negotiated direct with the owner who was behind in taxes and wanted to offload. I spent $3,000 cleaning it up and bringing it up to be rent ready. Got a tenant within the first week.
I am buying forecloses/distressed properties. But some times I buy direct from realtors, but way too much competition this way... one of other purchases had 14 offers on the table... ouch.
I could flip this also look at flipping , but after all out of pocket expenses I would prefer to hold. Also because the market is rising, I expect appreciation will work it magic.... more money by holding this particular property.
I stick to SFH, I wont touch multi housing in Detroit market, way too much risk in my humble opinion and I certainly do not need the headaches.
Selection criteria for tenants is absolutely critical... I understand this is the case in any market. But we are talking Detroit, we need to get this right. We are dealing with a different beast here.
Here are the numbers
$52,900 (cost to buy/rehab)
$60.00 Insurance per month
$1200 Taxes
$500 Maintenance pa
Rent $900 per month
20.41% gross yield