Detroit the Come Back Kid

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Detroit the Come Back Kid

Marisa R.
Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes

Hi All

Just thought I would share one of my recent deals.

Been playing in the Atlanta market since 2011, its been very kind, an amazing ride as the market has continued to soar. In fact very low inventory, surprise surprise...... its been tough of late.

My investment strategy has been buy and hold for cash flow and appreciation and the occasional flip and developing property.

Thanks to property I gave up my day job in 2007 and have just been continuing dabbling in property markets

I am now playing in the Detroit market, some will poo poo this, and I understand why. 

But..... "fortune favours the bold"" as they say

 I believe if you know what you are doing and have the right people on the ground, buy distressed, below market value properties you are on a winner. I know perhaps easier said than done, but I guess its persistence until you get it right.

One of my recent property purchases was in Aviation Sub, nice tree lined street.

This property is approximately 1400 sq foot.

Purchase Price - $36,000

Rehab - $5000  (rent ready)

Rehab (rent ready)  $975 per month

I am currently loading up. will be closing on a foreclosure in the next week or so. Will also post the numbers

Happy investing everyone

15Reply
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Most Popular Reply

Christine Johanns
Rental Property Investor · Jersey City, NJ · Member since 2017 · 74 posts · 18 votes
7y

@Gena Morris YAY FOR GROUP FLIP/JV Out of State Ladies club!!

3Reply
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  • Jamiel Strickland
    Rental Property Investor · Detroit, MI · Member since 2018 · 380 posts · 244 votes
    7y

    @Gena Morris ,

    Thats so exciting!!!! Woooooo!!! if you ever need anyone elses contact information I can recommend some good realtors, inspectors, or anything you need. 

    1Reply
  • Hoang Nguyen
    Rental Property Investor · Mill Creek, WA · Member since 2017 · 35 posts · 10 votes
    7y

    @Marisa Rowe

    I’m happy to see Detroit come back. I’ve been interested Detroit 2 years ago. The price was very affordable. You are bring a lot positive to the market

    2Reply
  • Gena Morris
    Developer · CA · Member since 2018 · 15 posts · 11 votes
    7y

    @Jamiel Strickland - thank you - hold your phone tomorrow!! :)

    1Reply
  • Jamiel Strickland
    Rental Property Investor · Detroit, MI · Member since 2018 · 380 posts · 244 votes
    7y

    @Gena Morris,

    Lol just texted you with an HVAC guy to help! Talk to you soon.

    1Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y

    For those interested in investing in the Detroit market... you need to have.... Eyes Wide Open

    There are certainly more maintenance costs as the houses are older, this is why it is absolutely imperative to ensure you have people on the ground and you are not over paying for maintenance otherwise it will kill your cash flow.

    Many property managers enjoy over charging, beware.

    I am very bullish on the Detroit market because I am seeing that things are starting to move and I am in for appreciation and cash flow. Cash flow only works if you get it right. Its not set and forget, you need to be proactive with this and network with good people.

    Smart money has already jumped into this market neighbourhoods like Corktown, University District etc.   but its not too late..... I believe its the beginning of a beautiful thing.

    I will post information as it crops up. Start with this article

    https://www.freep.com/story/money/business/2018/07...

    2Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y

    For those interested in this market... some more good news

    https://nextcity.org/daily/entry/detroit-expanded-plan-to-spread-the-wealth-to-neighborhoods

    0Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y
    Originally posted by @Gena Morris:

    As always - thank you, Marisa, for sharing for the better.

    Indeed, this is a positive article and for those of us investing in Detroit I would hope to meet up with you soon.

    Any interest in one-time mixer - handshake introductions, share, relax, ask/answer question, partner up?

    Gena Morris

    Hi Gena

    I may very well be interested in a joint venture in the near future. 

    Would like to flip.

    1Reply
  • Gena Morris
    Developer · CA · Member since 2018 · 15 posts · 11 votes
    7y

    @Marisa R. - that would be great.  Hhmmm maybe even a 'group' flip down the line. :) The possibilities are out there just waiting for us.

    1Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y
    Originally posted by @Gena Morris:

    @Marisa R. - that would be great.  Hhmmm maybe even a 'group' flip down the line. :) The possibilities are out there just waiting for us.

    Great

    When you complete this project, please post it would be great to view and look at the numbers, if you care to share

    0Reply
  • Gena Morris
    Developer · CA · Member since 2018 · 15 posts · 11 votes
    7y

    Yes! Absolutely.

    0Reply
  • Christine Johanns
    Rental Property Investor · Jersey City, NJ · Member since 2017 · 74 posts · 18 votes
    7y

    @Marisa R.

    I too have NRIEG. I have 3 properties.  It seems that NRIEG Covers very little. We had a wall pipe freeze and burst in my first (2fam) and water everywhere destroyed the rehab we just completed. We are trying to find a loophole or something in what they're calling (NRIEG) the  "master policy"   Do you simply have the basic? They told me the Special which covers much much more isn't offered in Wayne County. I am paying 352.00 per month for 2 single fam and 1 duplex. I was seeking input on any other insurance company that will work with Detroit .. Good for you to see your success. Im an out of town Detroit investor too. My manager is also my agent.  

    0Reply
  • Christine Johanns
    Rental Property Investor · Jersey City, NJ · Member since 2017 · 74 posts · 18 votes
    7y

    @Gena Morris YAY FOR GROUP FLIP/JV Out of State Ladies club!!

    3Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y
    Originally posted by @Christine Johanns:

    @Marisa R.

    I too have NRIEG. I have 3 properties.  It seems that NRIEG Covers very little. We had a wall pipe freeze and burst in my first (2fam) and water everywhere destroyed the rehab we just completed. We are trying to find a loophole or something in what they're calling (NRIEG) the  "master policy"   Do you simply have the basic? They told me the Special which covers much much more isn't offered in Wayne County. I am paying 352.00 per month for 2 single fam and 1 duplex. I was seeking input on any other insurance company that will work with Detroit .. Good for you to see your success. Im an out of town Detroit investor too. My manager is also my agent.  

    Sorry to hear this

    I have not claimed yet 

    Not too many options with insurance

    I think simplistic insurance?  For Detroit market could be another option

    0Reply
  • Gena Morris
    Developer · CA · Member since 2018 · 15 posts · 11 votes
    7y

    I, too, have some water in the basement and sewage issues. We are not yet certain as to the damage, if any.

    Yes, Christine!! Working on it!!

    I would like information on insuring, as well.

    Gosh, I hope there will not be too much of a financial burden for you.

    0Reply
  • Raman Singh
    Rental Property Investor · CA · Member since 2018 · 2 posts · 1 vote
    7y

    Hello Thanks for Sharing the information in this thread as i have read through multiple threads on Detroit

    My names Raman and I'm from California looking to invest out of state, leaning towards the Detroit market. I have money to invest but it will be a challenge buying my first property.

    If anyone wants to share there experience and advise me on how to find the best deals, i would love to talk. I am thinking about turnkey for my first property ? Trying to invest low for the first property.

    thank you

    1Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y

    Just a heads up for those wanting to invest in Detroit.

    Its been a pretty tough slog.

    I purchased 10 properties, in the main distressed properties, they all needed some form of rehab, some minor and some extensive. Varying from $3000 to $10,500. All this in 8 months

    Now I am in the bedding stage, making sure my asset is performing. They are all rented accept one and we are only a few weeks off this. The properties on average took about 3-4 weeks to tenant.

    If you go the section 8 route, it will take longer, there are pros and cons to this  Some will say in this market its the only way to go. I have taken a bet each way and have a mix. Time will tell

    Had some hiccups with property management but have resolved this. So as I have said before you need excellent property management in Detroit. There are many bad property management companies, and I am happy to share in a private message. 

    I have done some quick numbers, gross return on these properties per month should be around $8050,  $4830 net?? 

    Onward and upwards.... will continue to share my journey....

    4Reply
  • Philip Lassman
    Investor · Montreal, QC · Member since 2018 · 14 posts · 6 votes
    7y

    Marissa, that is awesome! Congrats on your success so far. What can you tell me about the multi family sector? Mid to larger size?

    0Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y

    This was my very first purchase in Detroit market. Zip code 48235

    Nothing fancy, but its certainly not a war zone, but I have had a couple of realtors look at this property and have estimated its worth at around $50,000, without testing the market I wont know, but I am not selling as cash flow is brilliant.

    According to Zillow its around $51,800, but this is an estimate of course.

    I actually inherited a tenant with this property, and she has never missed a payment and pays first week of the month

    Due to mid west harsh climate have allowed 1 months rent for maintenance. Coming close to 12 months of owning this property and I have spent half of this.... Those damn pipes in winter...LOL

    Purchase Price - $32,000  (rent ready rehabbed and tenanted)

    Rent  -  $800 per month

    Insurance -  $600

    Property Management - $80 per month

    Maintenance - $800    (allow one months rent)

    Taxes - $1200

    30% Gross  - ROI

    18.87% Net - ROI

    I doubt I can pick up at this price point now, but there are still opportunities out there if you look hard enough

    3Reply
  • Cassandra Sifford
    Rental Property Investor · New Castle, DE · Member since 2016 · 376 posts · 158 votes
    7y

    @Marisa R. ... You are constantly GIVING ME LIFE with this post and good information about renting in the area!!!  Detroit gets such a bad rap, but it's worth the risk if you're connected to the right individuals.  We take risks everyday, some mitigated more than others, but a risk none the less.  I'm still getting my funds together to invest in the area.  It's on the top of my list for long distance rentals.  

    0Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y
    Originally posted by @Cassandra Sifford:

    @Marisa R. ... You are constantly GIVING ME LIFE with this post and good information about renting in the area!!!  Detroit gets such a bad rap, but it's worth the risk if you're connected to the right individuals.  We take risks everyday, some mitigated more than others, but a risk none the less.  I'm still getting my funds together to invest in the area.  It's on the top of my list for long distance rentals.  

     Thanks Cassandra

    South Atlanta also got a bad rap when I was buying in 2011 but I went with my gut and it worked

    Detroit is  not for the faint hearted

    I have two more properties almost rehabbed, two weeks off then expect  an income of over $7000 per month

    1Reply
  • Cassandra Sifford
    Rental Property Investor · New Castle, DE · Member since 2016 · 376 posts · 158 votes
    7y

    @Marisa Rowe ... You're welcome! I can only imagine as I've driven through a few neighborhoods that need an extreme pick me up. It's key to have the right people in place to get the numbers you require to make it profitable. I had been thinking about long distance investing in Detroit some years ago, but wasn't financially stable. Then my niece moved there last year and we visited. It's been heavy on my mind ever since. When it's my time to step out on faith and invest in Detroit, I'll be ready :)

    0Reply
  • Cassandra Sifford
    Rental Property Investor · New Castle, DE · Member since 2016 · 376 posts · 158 votes
    7y
    0Reply
  • Eddie Espinal
    Woodtock, GA · Member since 2016 · 23 posts · 14 votes
    7y

    @Marisa R. Thank you for sharing all these info. I was able to read all 3 pages in this post and got butterfly in my stomach. I'm going to ask my realtor to start sending me some MLS deals from those Tier 1 and Tier 2 list you posted. I'm also based in Atlanta and I currently owned two rentals here. But I want to get on the Detroit bandwagon after hearing so many positive / negative feedback on the topic.

    Looking forward to sharing my story once I'm able to pull the trigger. 

    Thanks again!

    Eddie Espinal

    1Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y
    Originally posted by @Eddie Espinal:

    @Marisa R. Thank you for sharing all these info. I was able to read all 3 pages in this post and got butterfly in my stomach. I'm going to ask my realtor to start sending me some MLS deals from those Tier 1 and Tier 2 list you posted. I'm also based in Atlanta and I currently owned two rentals here. But I want to get on the Detroit bandwagon after hearing so many positive / negative feedback on the topic.

    Looking forward to sharing my story once I'm able to pull the trigger. 

    Thanks again!

    Eddie Espinal

     Hi Eddie

    Happy to share

    Feel free to contact me if you require any information

    0Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y

    More snippets.... and why I am so bullish 

    $310 Million Project
    Detroit's Midtown To Build Up With Two New Skyscraper

    Two skyscrapers between 25 and 30 stories are reportedly slated for Midtown, along Woodward near Whole Foods.
    Crain's has the scoop on the proposed new development, which would give Detroit another boutique hotel.
    A luxury Thompson Hotel is part of a large-scale $310 million project targeted for the vacant land currently wrapped with a scrim-covered fence reading "More Midtown" north of the Whole Foods Inc. grocery store property at Woodward and Mack avenues, according to sources.

    1Reply
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