First Detroit Single-family hack

[Greg Miller]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $24,000
Cash invested: $150,000

Purchased uninhabited single family home. House hacked for 2. Invested all cash as I am a Canadian resident but I love Detroit. $150k in with purchase price and renovations. ARV sits around $229-259k.
1st unit (1bd/1bath) currently STR - 6 months = $11k in Rental income 2k cashflow
2nd unit (2bd/1bath) being completed for STR
3rd floor Owners suite to be completed to be combined with 2nd unit for larger groups.

The area is seeing high appreciation even in the the slow down.

What made you interested in investing in this type of deal?

While working, I've been renovating and renting a couple multi-families in Toronto, but I also fell for the energy and possibilities in Detroit. Say what you will, but the city has an energy and strength for perseverance unlike many others. The homes are strong with great character that is expensive to add today. The homes were built in the Auto industry boom. There is intrinsic value in these homes and just need a little love and choosing the right areas. I now have 2 x 2 w/ a 3rd in probate

How did you find this deal and how did you negotiate it?

Found it on trulia and sent it to an agent I was working with. It had come down already, I negotiated $1000 less than asking, for $24k

How did you finance this deal?

Cash

What was the outcome?

There were many challenges but the outcome has been worth it.

Lessons learned? Challenges?

Problems with reliable trades, but that is slowing resolving itself.
Securing additional capital(loans, mortgages) have been difficult. Both being Canadian with a Michigan LP, and the lower value of homes for things like hard money.