New investor in Detroit looking to purchase rentals or rehabs

6 Replies

Hello everyone! I'm a "new" investor who actually has some experience, looking to purchase 3-4 rental properties (also open to the idea of fix & flip) in Detroit. I owned a duplex in Ferndale (a trendy inner-ring suburb of Detroit) from 2005-2018, and intermittently lived in part and rented it, so I have experience on a small scale with finding tenants and managing a residential property. 

In 2015 I obtained a lease on a commercial property in the Eastern Market district, a quickly appreciating area of the city. I run a small business out of that space (non real-estate related) and I also sub-lease a portion of the building to offset my overhead. My lease has an option to buy, and I am currently in the process of putting together my financing for that deal. I plan to continue to run my business out of that space as well as continue sub-letting, and hold the building for at least 10 years to take advantage of the rapid development in the area.

I sold my duplex late last year thinking I would need that cash as a down payment for the commercial deal. It's a long story, but it turns out I don't need the money for that purpose! So I find myself with a decent amount of cash to play around with, and I want to purchase a few rentals. I'd love to connect with real estate professionals who can help me with finding/ purchasing bank-owned or tax foreclosed properties, as it seems to be extremely difficult to have access to these deals before the bigger investors snap them up. I have also encountered a lot of difficulty in getting a response from brokers who have distressed properties listed- they simply don't return calls let alone show the properties.

I'm currently enrolled in a class called "Better Buildings, Better Blocks" that focuses on investment in Detroit's neighborhoods. For anyone reading this who lives in Detroit and is just starting out, I highly recommend the class if you can get in.

I look forward to connecting with others to help me figure out how and where to spend this cash and develop my portfolio!! :-)

Hey @Noelle Lothamer !

I think a person in your shoes would benefit greatly by just going out and networking/building a team of other professionals in the industry (brokers, attorneys, CPA's etc.), once you can get an established relationship with a few of these key players and prove you are a ready to act on deals they refer to you, then finding these sort of properties should be a breeze for you!

I'm currently in multifamily apartment investing niche, so I can't offer too much other advice as of right now haha

Are those types of investments where you want to put your extra cash right now (the properties you mentioned?)

Thanks Jake ! I am definitely working on building my network... I actually have an attorney who is partnered with me on my commercial property and also wants to be a partner in rental properties, so I have that box checked at least! :-) I think my best and most important asset in the short term will be a good realtor or broker who knows Detroit, so I'm hoping to connect with those folks here. Also planning on attending some REIA meetings in the area this month.

Yes, looking to put my cash in 3-4 multi-families (probably duplexes, but possibly up to quads). But, as my available cash isn't enormous, I also want to strategize as to how best to use a combo of cash and leverage to maximize what I can buy. Being that I am self employed, it's a little trickier to get financing than for someone who can back up their REI activities with a solid, dependable day job, lol.

Hello Noelle,

Welcome to BiggerPockets. It's certainly a good idea to start attending the REIA meetings to find the connections you're seeking. Best of luck on your future endeavors.

Sincerely,

@Noelle Lothamer welcome, I'm a local investor in the Detroit area that has been growing my portfolio. I started acquiring SFH for buy and holds and will have my first multifamily end of this month. Fix and flips may be a good strategy if you can get a great area and purchase price. with bank owned properties its sometimes a hit or miss depending on how responsive they are when submitting offers, I havent had much luck. Tax foreclosed properties make sure you go check out the area before purchasing. Yesterday a Out of State investor had me go check their flip out and it was beautifully done but was sandwiched in between two vacant homes that had fire damage. The other blocks had similar homes so his return might not hit his expectations.

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