Detroit Area

[Raphael Thomas]

Hello there BP My name is Raphael and I am new to real estate investing. I have built up my education, went to a few seminars and joined a REIA in my local area. I think I'm ready to do my first deal. I would be doing a partnership deal with my dad basically I am going to be the one finding the deals and he is going to fund me with the cash. He gave me 20,000 to start I want to do single family homes or duplex and areas near colleges as Michigan has 93 colleges this is the market I want to focus on, do any of the investor out there have any advice on where I may few a location that matches the criteria.

[Ramone Reese]

Raphael Thomas I worked for the then largest student housing renter in Ann Arbor (University of Michigan) for 5 years so I definitely understand your interest in student housing. Should you get a little more funding for that market you can make an insane killing. Rents are exceptionally high on campus but the market is changing some so you'd do well to connect with someone on the ground there. I have a wonderful connection for you if you go that route.

As for Detroit, with $20k for a down payment, I echo another poster's opinion that you might want to look into solid rentals in general. Most of the colleges in metro Detroit proper are commuter schools. Although Wayne State has seen a boost in students moving closer to the school given the recent (and rapid) development of midtown and downtown. But it's getting pricey down there. I'm not sure those numbers will cut it.

That said there are some other areas that you could turn that 20k into quite a bit. I bought 9 properties in 2014 for $41k cash. Spent about another $20k so far on rehab. The portfolio is worth about $180k very conservatively and brings in about $4500/mo now with about another $15k to spend on rehab it should be around $6500/mo in rent.

Might I also suggest Southfield. You could find a house for about $100k that should rent around 1200/mo with low-maintenance qualified tenants. That might be easier for an out of state investor as Detroit can be management-intensive. Could be a headache if you don't have a solid team on the ground here. You can find similar values to Southfield in Redford and parts of Dearborn and Dearborn Heights. I'm from the Northwest side of Detroit and live in Southfield. I stick to the areas I know. I'm sure there are good deals to be had east but it's out of my wheel house.