First BRRRR; Duplex in Detroit’s West Village

5 Replies

I’m am currently looking to acquire my first duplex property. Here’s the scenario I’m looking at and wondering what the input of more experienced investors is on it:

- 2 units built in 1913.

- $110,000 - purchase price; seller has agreed to carry the note until rehab and resale/refi has happened.

- $45,000 repair estimate for roof, front porch, back decks, plumbing and electrical, kitchen, and bathrooms.

- $65,000 Private money to finance repairs, cover closing, and have “uh-oh” money in the bank to fall back on.

- Comps are in the $260,000 - $480,000 range.

- The Area is right near downtown Detroit, which has MGM Casino, a bunch of businesses that are attracting young professionals whom would rather rent than own, the river walk, Belle Isle (anyone from Detroit understands Belle Isle’s significance), and the bridge to Canada.

- The neighborhood doesn’t look too bad, but it is Detroit.

My ultimate goal is to refi, pay off the seller and my private money, & be able to keep the asset. But, If that’s not possible I’m willing to sell to make some quick cash to put into my next deal. Is it possible to refi when your credit isn’t cream of the crop? Because this is a MF asset, should the bank care more about the assets performance? Would you do this deal? Is there any info I left out that you’d need to know prior to making a final decision?

I am no expert and I'll be the first to admit it. This will be my first buy & hold, first BRRRR, first transaction that I'm completely in charge of. I have assigned contracts and to be honest I don't really like the whole wholesaling side of it. I want to generate long term Cashflow.

I’m looking for any and all advice from experienced investors so that I can one day be on your levels.

Thanks in advance,

Duncan Hayes

Sounds reasonable so long as all of your numbers and comps are very specific to this property/street as far as ARV, rents, insurance, taxes, etc. If your comps (specific to a duplex in this case) stray even 1/8 mile they could not be accurate. I would also make sure that you have a lender already lined up to do the refinance.

Despite what many here think and say about Detroit, there are a lot of good people and renters looking for clean and safe housing in a desirable location.  You just need to be really specific and thourough with the whole process.

@Duncan Hayes I know the area well and on the surface it sounds like a great deal. The rehab budget seems a little light for a 1913 home but I haven't assessed the property. With the ARV you estimated and only $175k worth of debt, the BRRR should be fairly easy to do even with not so good credit. I'm active in Detroit so let me know if I can be a resource.

Hey all thanks for the advice. I appreciate it all!

Here’s an update:

I decided not to purchase for myself but assigned contract to other investors and will make a quick $5k assignment fee. Sellers original repair est was way too low. Even with her repairing the roof, the repairs cost is still high due to things like replacing the entire wiring system (it’s currently knob and tube). The home is 100 years old in Detroit so that should give an idea of scope of work. Didn’t find this out until I went and walked the property on Monday.

This isn't a deal I felt I'd be able to take on with my level of experience and the rehab needed. Glad to still be able to help the seller, help the buyers, and of course help my bank account. Buyers put up a $2,500 EMD, Closing next week!

Also buyers stated I could come to the property during rehab so that I can learn.

Outta everything, that’s my favorite part of this, because I’ll learn and maybe on the next one I won’t be so hesitant once I’m aware of what’s the norm here as far as damages to the property and the norm to repair it.

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