who's been successful in Detroit?

Question

I'm interested in getting on touch with some people that have had good (or bad) experiences in Detroit. Wholesaling, Buy & holds, flips, Multi-family

Jon W. · Answer

I buy/hold and flip in the city of Detroit and the Metro area.  Prices in the city have definitely gone up and it jumps each year but the city is changing in a real way. Where people would only go to Detroit for an event and leave, you now have people staying longer to check out the city. Non Detroiters are moving into the nice areas with force. It seems like a different place.  There are many many depressed areas still trading at low numbers (5-25k) but you really don't want to invest there.  The tenants, houses, and neighborhoods are tough to deal with.  If you buy in a nice neighborhood, and there are many, you can get great housing stock, great tenants, and have a good experience.  There are mortgage programs geared toward Detroit housing for any price level.  I have never had any problem with loans but my experience is with houses worth more than $50k.  Flipping is mostly possible in the nicest neighborhoods.  As with any older house, rehab costs tend to be a little higher.  So it does not make a lot of sense for houses that are worth $50k.  I only target flips in Detroit areas where the houses go for $150 - $300k.  Even then some houses will cost more to rehab than you can get out of them.  It is case by case.

Keith Jourdan · Answer

Only done a few deals in city of Detroit . Suburbs about 70+ in past 2 years. City is tough for a number of reasons. Selling can be difficult , most all mortgage companies won't lend on sub $50k houses , so flipping isn't possible in 90% of Detroit neighborhoods (end buyer won't be able to obtain financing ) unless you do owner financing . Buy and hold rentals can be profitable , but class d tenants are high turnover high risk, eat up cash flow quick .

Suburbs are great on the other hand. Good cash flow rentals and possible flip deals are out there . Major appreciation past few years in suburbs .

Keith Jourdan · Answer

Going to be tough. Anything for 20k is going to need tons of work and or in a warzone. Look into Lincoln Park/Taylor/Melvindale/Wayne areas. Might be able to find some turn key for $40k that rent for $800.

Account Closed · Answer

I've done well with boring buy & hold but mostly b/c of market timing (2011-2014).

So many people chasing the fast transactional quick buck (flippers, wholesalers, etc.) have flooded the Detroit market pumping up prices (i.e. 1849 gold rush) that I feel it's a larger risk now than it ever was during the dark days of the Great Recession.

Ex) Homes that were 25k-50k in 2012 are now being "rehabbed" with painted cabinets and new HWH and listed for 100k+.

Joe Mazur · Answer

Hey @Ralph Noack. Welcome to the community. I wholesale in Metro Detroit, not so much in the city but suburbs mostly. As @Patrick Squires said, there are definitely a lot of threads in here on this topic. Take advantage of the knowledge from those if you can. If you have any questions that I can possibly help with, feel free to PM me anytime.

Joe

Emilio Basa · Answer

Hi @Ralph Noack - I'm a wholesaler in the metro area and in the city. There are good and bad experiences a plenty lol. Too much to list. PM me or just ask away :)

Account Closed · Answer

@Jonathan Ghaly 20k homes in good neighborhoods was possible in 2010-2014. Very difficult to do now. If you find it, probably needs a lot of work and/or in a challenged neighborhood.

who's been successful in Detroit?

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