Hey Jimmy! I am a new investor here in Detroit. I am currently working on my first rehab on the east side of Detroit. It's a brick, 3 bedroom, 1 bath, with a basement and no garage. It's 1,194 sq. ft with a estimated $30,000 rehab costs, which comes out to $25/sq ft. Re-hab includes painting while house, renovations the kitchen and installing a half bath in the basement. I purchased it at $18,000 with about $3,000 in closing costs. Minimum expected ARV is $73,000. So I'm looking at a profit of $21,000 -$3,000(closing costs)=$18,000.
But your rehab costs us going to depend on what needs to be done and the renovation standards for the area. Which suburbs are you looking into?
Hey Jimmy! I am a new investor here in Detroit. I am currently working on my first rehab on the east side of Detroit. It's a brick, 3 bedroom, 1 bath, with a basement and no garage. It's 1,194 sq. ft with a estimated $30,000 rehab costs, which comes out to $25/sq ft. Re-hab includes painting while house, renovations the kitchen and installing a half bath in the basement. I purchased it at $18,000 with about $3,000 in closing costs. Minimum expected ARV is $73,000. So I'm looking at a profit of $21,000 -$3,000(closing costs)=$18,000.
But your rehab costs us going to depend on what needs to be done and the renovation standards for the area. Which suburbs are you looking into?
Thanks @Jamal, Congrats on your deal. Glad to hear your business is moving along. I am looking into investing in Detroit with interest in multi-family properties (some singles if the numbers suggest its wise) in a myriad of zip codes including but not limited to 48206, 48205, 48224, 48227, etc... Me and my partner are looking to BRRRR, as opposed to flip, but are interested in homes with similar margins like you have acquired.
So you know of any good contractors you could recommend, or Real Estate Brokers that may have great list we can comb through. Any and all information is appreciated.
I am closing on my very first property (flip) in about 2 weeks. I would like, very, much to connect with you, as my property is pretty-much exactly like yours (48221).
My contractor is not licensed in Michigan - we are from California, ans we, too, would appreciate any sharing of information.
@Jimmy Thomas Thank you for starting with the contractor question.
My first rehab is finally finishing up. I ended getting a property manager because I was shuffling my feet. That house should have a tenant in it in January. I purchased my 3rd occupied property that was performing until 2 months ago. The same property manager has completed that eviction. Once I get someone in my first property I'll start renovating the second. So everything is going slowly, but we're moving in the positive direction!
@Deboragh Hardy, Congrats! That area is going to be revitalized with the new Motown museum. It sounds like that house has alot of work needed. What work is being performed?
The work on the Motown Museum Expansion has already begun. In addition the Henry Ford Expansion is also close to fInish. It’s a great area!
Renovations for the house I purchased are underway. It is a total renovation Inside and out. Added a downstairs full bath in address to a Master Bath, so now 3 Baths 3 Beds and I hope to have it completed by June.
Hey everyone! I am just getting started with investing and am looking to also use the BRRRR method. I am not local though and am looking for a an references for a general contractor to complete my rehabs. @Jamal Adams, @Deboragh Hardy, @Gena Morris if you have any recommendations, I would greatly appreciate it!
Hi Jimmy, as a broker, property manager and investor in both SE MI and Detroit we have done hundreds of deals for ourselves and clients over the decades I can tell you there is no "straight" way to answer this question with the information you have provided.
First, I don't think self promotion is allowed on BP, but our crews and management team would be happy to help you evaluate and complete PROPER due diligence prior to purchase and if you need boots on the ground, our team can handle everything, soup to nuts for you as we do for clients all around the world.
Second, because the city is so big and filled with every type of deal under the sun there is no possible way to say how much is average rehab costs. If I asked about average rehab cost in NY (where BP says you are from) that answer would vary from NYC to Rochester....Detroit offers that range within itself. As does NYC...meaning, you on the upper west side or in Brooklyn for example. Same in Detroit. You have a 200K ARV in North Rosedale Park that can take a 12-15K Kitchen and fit in or you in Regent park where a 2-3K Kitchen is better suited.
Also, is this a flip or a rental?
You want to get the certificate of occupancy or no?
As an expert in SE MI and Detroit real estate, been in this biz for 20 years, as an active investor, licensed real estate broker, licensed builder, owner of a full service property management company that has the rehab staff to handle fixing minor leaks to tearing down and building new and everything in between....I can tell you we need more info. Feel free to give me a call or email here and I am happy to ask you a few questions, maybe get the address from you and give you an honest evaluation.
I have been a General Contractor in the Detroit Metro Area for the last 3 years. Maybe I can be of use. I would be able to give you quotes on all your projects in this area. Shoot me a text or call 734-447-sixninefivetwo.
I cannot answer your second question - but have a few SOLID contractors for your first. Let me figure out how to private message you...GREAT LUCK TO YOU!
@Jamal Adams, @Scott M., @Deboragh Hardy. Hello Everyone. I am looking outside my market here in Southern California. I would love to get some insight into the rental market, 2-4, units in Detroit, MI area. Good neighborhoods, ones to stay away from, the average cost per square foot (rehab cost), license contractors, great property managers, and ones to stay away from.