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

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

    For the first time in decades, the CBD sees over 1
    million square feet of office space under construction

    Resurgence well under way

    file:///C:/Users/Marisa/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/2L4EUZUM/detroit%20office%20market.pdf

    0Reply
  • Cassandra Sifford
    Rental Property Investor · New Castle, DE · Member since 2016 · 376 posts · 158 votes
    7y

    @Marisa R. ... You keep giving me life with these updates about Detroit!!!  I'm getting my capital ready so I can get in before the gettins' good :)  I listen to some BP podcasts and they stay bashin Detroit LOL I'm going to need @Brandon Turner and @Joshua D. to put you on one of them to set the cashflow record straight!  Come on fellas, set her up with her own episode :) :) :)

    2Reply
  • Marisa R.
    OP
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y
    Originally posted by @Cassandra Sifford:

    @Marisa R. ... You keep giving me life with these updates about Detroit!!!  I'm getting my capital ready so I can get in before the gettins' good :)  I listen to some BP podcasts and they stay bashin Detroit LOL I'm going to need @Brandon Turner and @Joshua D. to put you on one of them to set the cashflow record straight!  Come on fellas, set her up with her own episode :) :) :)

    Atlanta when the market crashed was another market that got a bashing, now look at it today

    Its been one of the best markets to play in

    Motto of the story, ignore the noise and watch the indicators

    1Reply
  • Cassandra Sifford
    Rental Property Investor · New Castle, DE · Member since 2016 · 376 posts · 158 votes
    7y
    Originally posted by @Marisa R.:
    Originally posted by @Cassandra Sifford:

    @Marisa R. ... You keep giving me life with these updates about Detroit!!!  I'm getting my capital ready so I can get in before the gettins' good :)  I listen to some BP podcasts and they stay bashin Detroit LOL I'm going to need @Brandon Turner and @Joshua D. to put you on one of them to set the cashflow record straight!  Come on fellas, set her up with her own episode :) :) :)

    Atlanta when the market crashed was another market that got a bashing, now look at it today

    Its been one of the best markets to play in

    Motto of the story, ignore the noise and watch the indicators

    Thank you for all the updates and the information. I've been reading articles on Detroit's uprising and asking my niece who stays there about updates coming to the city.  My time is coming much sooner than later! Hope to connect out here in the world one day 😊

    0Reply
  • Dylan TanakaPro Member
    Real Estate Agent · Detroit, MI · Member since 2008 · 455 posts · 178 votes
    7y

    Fresh info on Flippers in Detroit as of this posting

    https://magazine.realtor/daily-news/2019/04/10/house-flipping-is-trending-again

    0Reply
  • Johnny Lau
    Investor · San Jose, CA · Member since 2015 · 89 posts · 46 votes
    7y

    @Marisa R.

    Bought 2 SFRs in Detroit and looking for more, good numbers, good cash flow...

    Also bought 2 SFRs in Birmingham, Alabama.

    Looking to buy more in Detroit or a new market, Chicago for multis anyone? Florida for appreciating assets and desirable cities such as Cape Coral look very cool!

    But then again, Detroit kicks everyone’s a— for cash flow. Hard to pass on houses that cost the price of a nice car. :)

    1Reply
  • Nate Heaps
    Flipper/Rehabber · Lehi, UT · Member since 2009 · 12 posts · 1 vote
    7y

    I've invested in a lot of the cheaper properties in Detroit over the years, and the low end properties that rent for $700-$900 are really tough to get the numbers you see on a spreadsheet. There is constant maintenance, tenants falling behind in rent, tenant turnover, inspections from the city, etc. All of that kills your ROI. Maybe I am not using the right property manager, I don't know, but we have used multiple property managers in the past and it was all the same thing. Lots of problems all the time. Cash flow is not predictable with lower end properties. Just my two cents from experience. Would love to talk to the property manager you are using @Marisa R.

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

    I've invested in a lot of the cheaper properties in Detroit over the years, and the low end properties that rent for $700-$900 are really tough to get the numbers you see on a spreadsheet. There is constant maintenance, tenants falling behind in rent, tenant turnover, inspections from the city, etc. All of that kills your ROI. Maybe I am not using the right property manager, I don't know, but we have used multiple property managers in the past and it was all the same thing. Lots of problems all the time. Cash flow is not predictable with lower end properties. Just my two cents from experience. Would love to talk to the property manager you are using @Marisa R.

     Sure

    Property management and tenant selection is critical

    0Reply
  • Markos Gerges
    Rental Property Investor · Metro-Detroit · Member since 2017 · 34 posts · 14 votes
    7y

    I'm kind of curious to know your criteria for identifying good neighborhoods in Detroit? Although I invest in the suburbs I've been considering getting into the city but I'm not sure whats a good neighborhood other than by looking at vacancies, recent sales and other public information. 

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

    So inventory has tightened, which can only mean one think....prices rising, as per this article on the right

    https://www.crainsdetroit.com/real-estate/metro-detroit-home-sales-new-year-same-trends

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

    I'm kind of curious to know your criteria for identifying good neighborhoods in Detroit? Although I invest in the suburbs I've been considering getting into the city but I'm not sure whats a good neighborhood other than by looking at vacancies, recent sales and other public information. 

    My criteria is pretty basic, watch out for the neighbourhoods that are gentrifying where pries are actually rising or starting to rise

    Median of the area, via zip

    Owner occupier vs rentals

    Streetscape

    The idea is to try to purchase where an area is transforming from a C to a B class, and add value to the property.

    0Reply
  • Markos Gerges
    Rental Property Investor · Metro-Detroit · Member since 2017 · 34 posts · 14 votes
    7y
    Originally posted by @Marisa R.:
    Originally posted by @Markos Gerges:

    I'm kind of curious to know your criteria for identifying good neighborhoods in Detroit? Although I invest in the suburbs I've been considering getting into the city but I'm not sure whats a good neighborhood other than by looking at vacancies, recent sales and other public information. 

    My criteria is pretty basic, watch out for the neighbourhoods that are gentrifying where pries are actually rising or starting to rise

    Median of the area, via zip

    Owner occupier vs rentals

    Streetscape

    The idea is to try to purchase where an area is transforming from a C to a B class, and add value to the property.

    Hi Marisa thanks for the response!

    If you are holding onto properties with the idea that these neighborhoods will gentrify isn't this the same or similar concept as speculation? I've been wanting to get into Detroit but I have only been able to determine a business model of flipping in the neighborhoods you've mentioned and from tons of research.

    I think with the risk involved with rentals entailing quite a ton factors the strategy I have in the suburbs is more appropriate for a younger/less experienced investor like myself as long as the metrics line up i.e 15%-25% ROI. And typically I've been able to secure properties at a similar price point as the ones you've mentioned in your original post but probably at a lesser ARV i'll have to admit especially since with rental properties I try to avoid unnecessary upgrades such as granite counters, major cosmetics, etc

    Love to hear your thoughts :)

    0Reply
  • Cassandra Sifford
    Rental Property Investor · New Castle, DE · Member since 2016 · 376 posts · 158 votes
    7y

    @Marisa R. ... how do you find out if a property is owner occupied or a rental?

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

    I'm kind of curious to know your criteria for identifying good neighborhoods in Detroit? Although I invest in the suburbs I've been considering getting into the city but I'm not sure whats a good neighborhood other than by looking at vacancies, recent sales and other public information. 

    My criteria is pretty basic, watch out for the neighbourhoods that are gentrifying where pries are actually rising or starting to rise

    Median of the area, via zip

    Owner occupier vs rentals

    Streetscape

    The idea is to try to purchase where an area is transforming from a C to a B class, and add value to the property.

    Hi Marisa thanks for the response!

    If you are holding onto properties with the idea that these neighborhoods will gentrify isn't this the same or similar concept as speculation? I've been wanting to get into Detroit but I have only been able to determine a business model of flipping in the neighborhoods you've mentioned and from tons of research.

    I think with the risk involved with rentals entailing quite a ton factors the strategy I have in the suburbs is more appropriate for a younger/less experienced investor like myself as long as the metrics line up i.e 15%-25% ROI. And typically I've been able to secure properties at a similar price point as the ones you've mentioned in your original post but probably at a lesser ARV i'll have to admit especially since with rental properties I try to avoid unnecessary upgrades such as granite counters, major cosmetics, etc

    Love to hear your thoughts :)

     Not sure if its speculative ???if an area is already appreciating and cashflowing. 

    I actually think flipping is probably going to be high risk for me unless I hold for a few years then offload. Also lots of investors doing this in Detroit

    There are risk involved for sure, I am trying to mitigate this. Its a learning curve

    On the flip side I had 5 tenants not renew their leases to date this year, this is in Atlanta. This has just killed my cashflow...damn

    At the end of the day property investing has risks regardless. Give me another 12 months and I will update you on the progress

    0Reply
  • Markos Gerges
    Rental Property Investor · Metro-Detroit · Member since 2017 · 34 posts · 14 votes
    7y

    @Marisa R.

    True... I guess I just meant it from the prospective of home buyers before the recession who were doing the same thing buying properties in neighborhoods that were appreciating, holding them and then getting burned. But then again that all comes down to the risk aspect.

    And yes I'd love to hear your progress, thank you for your insights!

    0Reply
  • Max Pallatt
    los angeles, CA · Member since 2018 · 56 posts · 11 votes
    7y

    Detroit should give you a Motor City Award Marisa.  This has been a phenomenal thread read !  Thank you !  And thank you to all BP-ers who've also contributed.  See you on the road upward !

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

    A bidding war on this one in Bagley

    Good location, but burnt out house, beggars cant be choosers.. just not a lot around in right location

    https://www.trulia.com/p/mi/detroit/18482-stoepel-...

    0Reply
  • David Prince
    Metro Detroit · Member since 2019 · 4 posts · 0 votes
    7y

    Hi Marisa,

    What did that burnt out house go for? How much would a rehab run on that property??

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

    Some more  good news

    Its quite interesting to see what is currently happening, I see more upside if you buy well

    https://www.michiganbusiness.o...

    1Reply
  • Marta Navales
    Rental Property Investor · MD · Member since 2019 · 5 posts · 2 votes
    7y

    Hi all, 

    Ive been following this thread with interest for a few months. Thank you for sharing your knowledge and experiences. 

    I am an investor from California and I purchased a property in East English Village a few months ago.

    As many of you have pointed out, maintenance issues and proper property management are crucial.  I have experienced a fair bit of this, and it hasnt been pretty.   I am flying to Detroit next week to try to fix a few issues that dont seem to be able to move forward..

    if some of you are free and able to, I would love to catch up.

    I am after a team I can work with in the near future. I have scheduled appointments with some professionals I have contacted remotely but I feel quite week regarding contractors and property managers.  Any advice from you guys will be highly apreciated. 

    Looking forward to receiving your comments.

    Cheers,

    Marta 

    0Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Marta Navales:

    Hi all, 

    Ive been following this thread with interest for a few months. Thank you for sharing your knowledge and experiences. 

    I am an investor from California and I purchased a property in East English Village a few months ago.

    As many of you have pointed out, maintenance issues and proper property management are crucial.  I have experienced a fair bit of this, and it hasnt been pretty.   I am flying to Detroit next week to try to fix a few issues that dont seem to be able to move forward..

    if some of you are free and able to, I would love to catch up.

    I am after a team I can work with in the near future. I have scheduled appointments with some professionals I have contacted remotely but I feel quite week regarding contractors and property managers.  Any advice from you guys will be highly apreciated. 

    Looking forward to receiving your comments.

    Cheers,

    Marta 

    Marta, shoot me a note. I may be around when you're visiting.

    0Reply
  • Keyonte SummersPro Member
    Harper Woods, MI · Member since 2017 · 384 posts · 311 votes
    7y

    @Marta Navales I would be free to meet-up. I also have a property in East english village . I am self-managing all my properties at this moment as I am planning to spin that off as a business once I get enough units. I have a solid team of contractors I usually use for my projects.

    0Reply
  • Alex KhanPro Member
    Specialist · Southeast Michigan · Member since 2015 · 300 posts · 244 votes
    7y
    Originally posted by @Marta Navales:

    Hi all, 

    Ive been following this thread with interest for a few months. Thank you for sharing your knowledge and experiences. 

    I am an investor from California and I purchased a property in East English Village a few months ago.

    As many of you have pointed out, maintenance issues and proper property management are crucial.  I have experienced a fair bit of this, and it hasnt been pretty.   I am flying to Detroit next week to try to fix a few issues that dont seem to be able to move forward..

    if some of you are free and able to, I would love to catch up.

    I am after a team I can work with in the near future. I have scheduled appointments with some professionals I have contacted remotely but I feel quite week regarding contractors and property managers.  Any advice from you guys will be highly apreciated. 

    Looking forward to receiving your comments.

    Cheers,

    Marta 

     Hello Marta, Glad to see your interest in Detroit. East English Village is a great area! 

    Also just picked one up in That neighborhood last week which is starting the rehab this upcoming week.

    Dealing with contractors and subcontractors can be a real pain but I believe BP has enough great people with properties and resources in the same general area to point you in the right direction. 

    @Travis Biziorek @Keyonte Summers 

    I also have a partner you may be able to work with and discuss local to you. 

    Feel free to reach out anytime.

    248-979-8119
    0Reply
  • Robert Collins
    Rental Property Investor · Greenville County SC / Atlanta, GA · Member since 2017 · 403 posts · 120 votes
    7y

    @Marisa R.

    Amazing 😉. Detroit will be one of those places a lot of people we say , dang I wish I got into that market!

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

    @Marisa R.

    Amazing 😉. Detroit will be one of those places a lot of people we say , dang I wish I got into that market!

    I am already saying Dang..... Corktown

    0Reply
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