Will You Achieve Appreciation in the Detroit Market - 2019

Question

This is one for the experts. What are you seeing????

I have been playing in the Detroit market, have posted some my cash cows. Sure the returns are nice, as long as you have good tenants, and good property management in place. Not necessarily the easiest thing to do. So far, so good.

However, appreciation I think is very much a mixed bag..

I see many pockets are starting to rise and have been for a while, now will we see the ripple effect happening.

Here is some good news for Detroit

https://www.wxyz.com/news/detroit-planning-multi-m...

https://www.nationalgeographic.com/taking-back-det...

Bala A. · Answer

Places like Bagley subdivision, in Detroit Northwest, were selling 30-50K just 18 - 24 months ago.

Today it is anywhere between 100 - 150K for those same homes.

In a very short time, the prices have moved up astronomically.

Whilst being Cash flow positive for Investors. And getting the Capital Growth.

Who says you can't have both!

:-)

(for e.g I have 18681 Northlawn tenanted at 1200 per month which I bought for 41,000 in 2017 and now even the conservative Zestimate has it valued at 128,000)

In fact, since some of the prices have soared so much in certain pockets, like Bagley, Rosedale Park, Uni Dist, East English Village, we are no longer buying in these "Bagleys" anymore and are sniping at the next domino effect markets which are the next in line. Like the neighborhoods of Winship, 5 Points, Berg Lahser, West Outer Dr, Castle Rouge, Malvern Hill areas etc.

Jay Hinrichs · Answer

good luck with lower end rental appreciating.

what I have seen with that market is some pretty cool new construction infill were you can acutally build a new home and make 50 to 75k in 9 to 10 months. takes a lot of cash flow rentals to equal those numbers.

I dont have a team there but its on my radar .. rentals are not my bag to small of income and no upside.

but i liked what i saw in the new construction space.

Jay Hinrichs · Answer

find a good broker.. and be very cautious of wholesalers.. get on MLS feeds  they are free and come to you daily. not that hard.

figure out the median price point for the city and buy above it.. that usually will in of itself get U in the better areas.

lets say the median is 150k then simple logic will tell you a 50k home is going to be in the roughest areas etc.

Jay Hinrichs · Answer

if I owned in that subdivision i would be a seller and take a nice profit.. :)  my experience in Detroit was the opposite.. made loans there in 2002 to 2004. properties were appraising at 120 to 150k  and by 06 you would be lucky to get 20 to 30k for them and by 2009 under 10k so went in the wrong direction. LOL..  but happy to see it bounce back.  Stay away from anything Morris invest offers and you have a chance

Marisa R. · Answer

Hi Everyone

It appears the answer is yes, the stats don’t lie

I am happy I purchased 12 months ago

https://www.michiganradio.org/...

Jay Hinrichs · Answer

arnt you impressed I even knew about it and the name.. I can tell you in 2002 to 2004 when I was lending there.. there was far more than 2 arson fires a year  :)  but hey like said I am happy to see parts of Detroit coming back and I was really impressed with some of the infill new construction in the 300 to 500k range.. so much so if I had a team there I would be building there.. I will leave all the rentals to you folks but I like what I saw

Jay Hinrichs · Answer

it is a continuing social experiment..  On devils night there will be hundreds of houses set on fire.. all vacant of course :)  but at one point there was 40 to 50k more homes than necessary for the population.

Jay Hinrichs · Answer

Bill when i was there this last fall few things.. Quicken/rocket mortgage owner has pumped tons of money into downtown.

and big auto is expanding currently..  there are still very bad areas of the city.. but like all cities there are plenty of good areas Mainly out of the city of detroit proper.

Cynthia Miller · Answer

I realize this is from 8 most ago but I was interested in this as well as I've been seriously contiplating getting out of the Detroit proper market for the last yr. Or so but the only thing keeping me holding on is the thought of the possibility of a big jump in prices, say the next 3-5yrs.

For me, the rentals just are not profitable and very time consuming as I've been managing myself and painting and cleaning etc for ea. Move out.  The low income properties just don't attract quality tenants.

Ive seen so much revitalization the last few years but its not going to matter how much the city improves if new blood doesn't move in.

i see people buying up abandoned houses left and right and fixing them up and the city is doing a good job knocking down the condemned ones. But I don't see anyone actually selling.  I don't see any new blood moving into the neighborhoods. I've seen the same house that were rehabbed sitting for the last 6 most unsold. I keep seeing sales prices dropped.

So im wondering if the market will actually go up or will it go down once the frenzy wears off and people realize they can't do a flip and sell it for any decent amount of profit.

I'm not referring to midtown, Rosedale park or the few other desirable pockets.

Marisa R. · Answer

LOL

Sounds like a fun night

Seriously though, good stuff is happening in Detroit

google is your friend

Some big players pumping big $ into this market

I started a thread

“Detroit the come back kid”

For those interested it may give an idea on what is happening

Will You Achieve Appreciation in the Detroit Market - 2019

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