All Forum Posts by: Erik E.

Hello Eric, thanks for your feedback on the map I am glad to hear that your property is doing well.

 Cash flow is somewhat independent from the neighborhood grade. If you know how to purchase and operate properly, you should be able to collect rent and cash flow in any neighborhood. 44104 wouldn't be my ideal neighborhood to invest in as I find it more risky, but I am sure there are investors making positive returns there.

@Erik E.

Typically riskier areas (D/F) will cash flow higher than B/C, so what you are saying makes a lot of sense. 

I too have put together a map using data from the annual Census to generate the grades (A to F) 

If we look at the same geographies but with rent to price ratios, it's clear that lower ranked areas tend to produce higher yields (on paper at least) 

Grades Map

Rent to Price Ratio Map

Linear Regression model comparing raw grades (0 to 1) and rent to price ratios. The numerical mappings are:

- 0.0 ≤ x < 0.2 = F

- 0.2 ≤ x < 0.4 = D

- 0.4 ≤ x < 0.6 = C

- 0.6 ≤ x < 0.8 = B

- 0.8 ≤ x ≤ 1.0 = A

As you can see, as the score increases, the rent to price decreases 

Link to Interactive Chart

And lastly, here are the average rent to price ratios for each grade cohort

whoa! Very interesting.

@Erik E. You can search on the HUD website for fha approved lenders in your state. Google "fha lender list search hud" to find them. Are you planning on doing any renovations? If so, that's a fha 203k loan product and the lender list gets even smaller. I have done quite a bit of research as I'm planning to use this loan product myself once I find the quadplex I want. Feel free to message me to talk through it.

I would check with your real estate agent on which lenders they would recommend. Congrats on your first approval! 

Would like to purchase investment properties in Detroit can anyone help advise?