Sherwood Forest/Green Acres 2 Unit - Good Investment?

Question

Good Day Everyone -

I've got what appears to be a unique opportunity to invest in a recently renovated, 2 unit in the Sherwood Forest/Green Acres area. 1,100 sq ft per unit / each w/ 2 beds/1 bath. I've been told could rent for at least $1.500/unit (would fit the 1% rule).

I'm heading out there next weekend, but before I do, would love to pick the brain of local investors/agents, etc. on the SW/GA neighborhood. Trying to get a feel for the risks (squatters / theft / tenant demographics) before I head out there myself. Is $1,500/month realistic & is finding good tenants a problem in the neighborhood? My strategy is to find a long-term tenant in one unit and Airbnb the second and see which makes more financial sense.

Any info on the neighborhood would be extremely helpful.

Really appreciate any feedback.

Thanks!

Manny

Otis Gathing · Answer

Sherwood Forest is an A1 area, as long as the numbers work and you put the right personnel in place you shouldn't any problems.

Drew Sygit · Answer

@Manny Rana with no address, we're limited with what we can tell you about rents.

Theoretically, $1500/unit is possible. It's a very nice area of the City of Detroit, decent amount of Class A properties, lots of Class B and some Class C.

The challenge MAY be that you'll be competing with Downtown & Midtown areas, where $1500 for a 2-bed unit is more the "norm".

Here 's recent comps from Zillow (both units of a duplex):

https://www.zillow.com/homedet...$1600 for 3/1.5 1600 sq fthttps://www.zillow.com/homedet...$1400 for 3/1.5 1600 sq ft

Michael E. · Answer

Outstanding information here! Thanks Drew!

A, B, C, D: Which property class should new investors go for in Metro

Drew Sygit · Answer

@Michael E. Ferndale is also a Class A city, just less expensive than Royal Oak, which is less expensive than Birmingham, which is less expensive than Bloomfield Hills.

@Manny Rana share the address and we can tell you more or...You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

https://www.biggerpockets.com/...

Gary Carver · Answer

@Manny Rana. This is a good area to invest.. very popular …Not quite sure about getting that amount per each unit

Michael E. · Answer

Well I'm just a newbie investor that is looking in the Metro Detroit area but it seems like a decent area. It's just south of the border for Ferndale which is a "class A" adjacent area. Royal Oak being the "class A" area. How much you could get will depend largely on how nice the remodel is. $1,500 seems really high for a 2 bed in that area but 1,100sf is a lot of space for a 2 bed. There are high-end units renting for that much and more, in the metro area. Also, how many abandoned houses are near-by will affect the price of both rent and the property. Conservatively, I would say you could ask $900-$1,000 and have "the pick of the litter" for tenants, even if it is just an average remodel.

But that is just a general statement based on the limited info presented. One of the tricks I use to see if sellers are bumping the rent estimates too high is by looking on apartments.com for similar available units in the area. If you have a target neighborhood you can create a favorites list of all the units and track which ones get rented out and how fast. This will let you get a good feel for demand (and price) in the area.

Hope that helps and good luck.

Drew Sygit · Answer

@Michael E. read our Deep Dive series to find out:)

Michael E. · Answer

Thanks for the info @Drew Sygit. If you don't mind me asking, what areas would you call class B? Just looking for some reference.

Thanks again

Manny Rana · Answer

@Drew Sygit Thanks very much. I'm going to follow the "Deeper Dive" series.

Manny Rana · Answer

@Gary Carver Appreciate the insight. What's a realistic target for monthly rents in the area for my specs?

Sherwood Forest/Green Acres 2 Unit - Good Investment?

Sherwood Forest/Green Acres 2 Unit - Good Investment?

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