What are Rehabbers and Buy and Hold guys looking for in Metro Detroit?
Ready to go at a few lists (SFR's) here and want to know what the buyers are buying. ROI you're looking for, rehabbers? Cap rate, landlords?
What fits your criteria for a deal?
Let me find one for you.
Fix & Flip:
- Min 3 br / 1 bath (1000+ sq ft)
- Max purchase price $200k
- Must have both a basement and a garage
- Target 20% return on the deal (not annualized)
Buy & Hold:
- Prefer 3 br / 1 bath (1000+ sq ft), consider 2 br
- Must have either a basement or a garage
- Not in the city of Detroit or Inkster
- 15% minimum ROI (accounting for property management)
@Jeff Lubeski has your criteria above changed?
@Billy Baumann My criteria has not changed much. My going in criteria for fix & flips is pretty much the same. I have made some exceptions if the deal still looks good though. Flipped a house without a basement last year because the numbers looked really good. As expected, the lack of basement hurt a bit on trying to sell it. Still did pretty good on it though. I also bought one without a garage, but the numbers allowed us to put up a garage.
For Buy & Hold the only change is that I've ventured into Detroit and have 2 rentals there now. I'm optimistic about Detroit. There's a lot of opportunity but it's a big city with a lot of varying neighborhoods and I've got a lot to learn.
@Jeff Lubeski thanks for the insight. Also, I agree in regards to Detroit. Do you have a particular area you prefer over another (Mid-town, Corktown, Greektown, etc)?
@Billy Baumann I've just ventured into Detroit and am not greatly familiar with it. The city is massive (142.9 sq miles). A couple of good resources for looking at neighborhoods is www.makeloveland.com also go to www.motorcitymapping.org
These are a first good step to see how many vacant lots there are, abandoned houses, dumping, etc. Sometimes one street over in a neighborhood can make a difference.
As I mentioned, I have 2 houses in Detroit right now. One in Nortown and one in Bagley (neighborhood, not to be confused with the street).
Norwood - I'd be very selective if buying another here
Bagley - I'd buy more here