All Forum Posts by: Kenneth F.

@Marisa R.

Major key in this market is developing the right team especially in Detroit. To be honest its becoming a lot competitive with finding deals today but it still is possible. They are calling Detroit the "Come back City "

Check out some of the recent news articles and documentaries about Detroit.  It's gained a nickname of "The Comeback City".  There has been recently a lot of large companies investing in Detroit. 

Not to forget some of the major players such as Ford, Cadillac with their choice on coming back into the city of Detroit and Flex and Gate (automotive manufacturing company) that just opened a new factory (October 2018) . All good signs that jobs are coming back! Not only manufacturing jobs but tech jobs since Ford is expanding their autonomous vehicle research in Corktown. I'm sure many other companies are making the same move because of the tax incentive offered by the City.

Unfortunately the reputation of a City that went bankrupt will always linger but hopefully time will fade that.  Just know the city has been improving but it's not going to happen overnight. Below are some links to some of the growth in Detroit.

https://www.detroitnews.com/story/business/columni...

Keep in mind, like in any other city there are good and bad areas.  Just do your due diligence on deciding where to invests. 

I switched over to Simplified Insurance company from NREIG. NREIG's rates went up almost 30% which prompted the switch. Not sure if anyone recommends another Insurance company. 

BRRRR into another set of Buy and hold properties.

Marisa,

All good points that show a growing City.  Not to forget some of the major players such as Ford, Cadillac with their choice on coming back into the city of Detroit and Flex and Gate (automotive manufacturing company) that just opened a new factory (October 2018) .  All good signs that jobs are coming back!  Not only manufacturing jobs but tech jobs since Ford is expanding their autonomous vehicle research in Corktown.  I'm sure many other companies are making the same move because of the tax incentive offered by the City.

Unfortunately the reputation of a City that went bankrupt will always linger but hopefully time will fade that.  I do agree with Alon Rokach that it will not happen overnight but there is progress happening.  Below are some links to some of the growth in Detroit.

https://www.detroitnews.com/story/business/columnists/daniel-howes/2018/10/17/trust-and-economics-fuel-fords-city-tax-incentive-plan/1672896002/

https://www.detroitnews.com/story/news/local/detroit-city/2018/10/08/flex-n-gate-plant-opens-detroiters-half-workforce/1562635002/

https://www.freep.com/story/money/cars/general-mot...

To be honest, I have never had my sights on that area.  From an overview regarding the price points, it seems to be a higher end.  It all depends on what you intend on doing, whether you are going to flip or buy and hold.  But I check out the areas I mentioned in my previous comment. 

Originally posted by @Marisa R.:

@Kenneth F.

I definitely agree that inventory is shrinking especially since Metro-Detroit has been getting a lot of positive exposure.  They just announced that Cadillac will be returning to Detroit after a four year stint in NYC and the recent Documentary on the History Channel "Detroit, Comeback city"

Majority of my units are located on the Westside of Detroit. Some of the areas that I like focus on is Bagley, Fitzgerald and Grandmont/Rosedale.  Those areas have seen a lot of appreciation and has been harder for me to find deals.  When I can't find units directly in those neighborhood, I find other pockets that are thriving.  Neighborhoods that are well kept and not surrounded by Blight.  I was actually surprised when I first visited my units.  I saw that the areas my team advised on had were like any other working class neighborhood and the stigma of "Detroit being all burned out homes" wasn't true.  As you know, there are definitely neighborhoods that are burned out and its only a matter of time till the city takes care of that.    

When I first started, I did everything wrong like any new investor does. Rushed right in and paid market rate for the property and took the word of the realtor. Lets say he no longer works for me. But any challenges are learning tools. After vetting out multiple realtors and finding my team, I've been able to accumulate a portfolio of ten SFHs. Now that I've had some time to season myself in the Detroit market, I buy distressed properties that may need a $15K to $20K rehab. I like to find units that need some of those big ticket items (CAPEX) like the roof and hot water heater/furnace. This way majority of my "Bones" are good for the next 15 to 25 years.

Majority of my purchases range from $26,500 to $40,000. They have produced a Net ROI of 12% to 17.5%. The ones that produced a lower ROI were from my early purchases from that one realtor who only wanted a quick sale and not build a long term customer.

It's great to see another member on Biggerpockets doing well in Detroit.  Having the right people on the ground will make or break you if you're an out of state investor.  I've been investing in Detroit as a buy and hold investor.  I agree there are neighborhoods that are thriving and neighborhoods that the city is allocating funds for. 

AAPEX Home Inspections Services LLC. Great company that are very thorough and charge competitive price. Never had any issues with them.

Yes, I am transparent with the realtors and I also let them know during that conversation on what my game plan is. I've accumulated 10 SFH's within a period of 6 months. Ill PM you some info.