Is Detroit market is still cashflow in 2024

[Shibashis Dutta]

Hello.

need advice on experienced investors in the Detroit area. How is the market and opportunities this time.

and if anyone can refer me a good property management in the area. That would be great.

[Travis Biziorek]

Hey Shibashis, I can talk for hours about the Detroit market. I've been investing there personally since 2019 and own 12-doors in Detroit proper.

I lived on the ground there from 2017-2022 but now live back in California.

To answer your questions... yes, you can still find cash flowing deals in Detroit. But like most markets, it's getting increasingly difficult.

Plucking something from the MLS is tough because there's not a ton of inventory. An uneducated eye may think that's a silly statement because there appear to be a ton of listings in Detroit.

But many of them aren't worth buying. The ones that worth purchasing likely still need some amount of work... I'd say $10,000 - $15,000 in rehab. If you buy a median priced home in Detroit today ($90,000) and have to put $10,000 - $15,000 into a rehab, you may not cash flow. You really have to know how to do your numbers.

A lot of that may come down to the property taxes. They are high on a percentage basis in Detroit, but relatively low on a nominal one. I've personally done 60 deals in Detroit this year and I've seen monthly property taxes anywhere from $20/mo (extremely rare) to $350/month. Usually you're falling somewhere in the $150-$200 range, but you really need to understand this number and how to determine it.

The market, in general, in Detroit is rapidly appreciating. Take a look at the median list price over the last five years. It's doubled and it doesn't appear to be slowing down!

If you understand what's happening there, it makes a ton of sense. There's been a massive revitalization effort that started downtown and has spread throughout the city via the Strategic Neighborhood Fund (SNF). 

There's a bunch more industry outside of just automotive. And the Census officially announced Detroit's population ticked slightly higher in 2023 for the first time in nearly 70 years.

We're still early innings for Detroit's growth and appreciation. 

I'm personally still finding great deals for me and the clients I work with. But I'm almost exclusively sourcing them off-market. We're able to find similar stuff that you'd get on the MLS but at a discounted price. Put a little rehab into it, and you have pretty solid BRRRR potential.

Just today I had a client text me that his appraisal came in at $122,000. He purchased the home for $63,000 and put $20,000 into a light rehab. It's a huge win, and I admit, at the top end in terms of outcomes.

Most deals are leaving $5,000 - $15,000 post-refinance but still nicely cash flowing.

In short, yes, there's a lot of opportunity in Detroit but you really need to understand the market or work with folks that do.

I'd be happy to chat with you or anyone else looking at the market there.

[Drew Sygit]

@Shibashis Dutta Detroit has 183 Neighborhoods - some you want to invest in, some you don't.

We've got them all on our website and have info on ranking them.

What else are you looking for?

[James Wise]

Quote from @Shibashis Dutta:

Hello.

need advice on experienced investors in the Detroit area. How is the market and opportunities this time.

and if anyone can refer me a good property management in the area. That would be great.

 Detroit's one of the few markets left that still cashflows like a MFr.