All Forum Posts by: Christian Hutchinson

Where on Blaine St?

If its east of Rosa Parks the $15K investment would be well worth it.

I lean towards holding it $15K isn't much.  Also, depending on what you paid for it.  You probably just need a local show you how to work the property.

I would guess, get one unit nice and clean get a tenant then AirBnB the other and have the other tenant hand out the keys. Getting a decent tenant shouldn't be too bad, with the right stuff.

I own property in Detroit in areas that was once "The Hood".

My bit of advice.  Don't be afraid.  I bought a property where hand to hands were being done in front of it because it was vacant.  I bought the property I pulled up and asked them if they needed help? Next day they were gone.

I had a younger guy walking up and down my street serving cars, I saw him walking by, "I asked you lost? Because you are walking in circles around the block, you need a phone to call someone?" Next day they are gone.

Criminals are lazy, they want the path of least resistance.  My Wife runs the locals off too when she shows up.  Lots of these bad actors are results of low expectations. They have grandmas, older uncles, etc that wouldnt let that bevior fly at their homes.  Make it known this isn't the place.  Not aggressively, but direct and straight forward.

The vacant uncared for property down the street from a place I had people running drugs/prostitution out of it. I called the property owner to try to get them to fix it. They told me to F** off. Well I have cameras I had the activity recorded. 

So one day this summer I had my lawn crew and handyman clean up the outside and board up the property one morning. People literally came out of their houses applauding. My Dad said the guy could sue us, and I told him if we go to court, I'll role the tape of the activity on his property, and we'll see what a judge says.

If you show you care about the neighborhood AND the people in it trying to help it be safe and clean people will like you. If that means sweeping the whole sidewalk and not just your own or shoveling the snow of some of the older people near you. It builds up currency with the locals.

 My buddy who works for a hedge-fund told me that 10 Year Note drives lending. But that was talking about shorter term loans for business or capital equipment.  4-10 years with 25/30 Year Amortization. Also, he stated, I learned in college, and I have heard on TV on CNBC/Fox Business/Bloomberg, that when cost of borrowing rises the value of the asset decreases, but numerous other things kick in inflation and the sort.
But he basically said the value of the asset and cost of borrow is an inverse relationship when controlling for inflation, and scarcity (demand).

So a little background on this area...
The Detroit Golf Club just scored a PGA Event (The National, Title sponsor is Rocket Mortgage) starting in Late June/ Early July 2019.

Also, its pretty much local knowledge that The Detroit Grand Prix will align a week prior or after to the Golf Tournament (talks underway).

Lastly, in 2020 The Auto Show is moving to June.  There is a major lack of hotel space anyway and it was held in January when hotel occupancy was horrific. Well this was a bigger problem for crews assembling displays who arrive 12 weeks out to begin the build-out and stay 4 weeks after to tear down.  Properties like this could cater to this market and at premium.

The Bank, whoever that is, might realize how effective this property could be as a short-term rental because its challenge long-term, and based on comps people won't pay $200K especially with higher interest rates.  The University District is full of Judges, Business Owners, High level City Employees, etc. The house listed at $279K that looks like University District Property, its also 2x the size, more stately, has walk-in closets, multiple bathrooms.  The subject property not so much. IF the bank is saying this property is valued at $200K, I want their number because I have stuff in Brush Park, North End, and Islandview, I'll take my equity out and run.

The Owner is doing Section 8 because a Market Rate Tenant could get much more house or better locations at that price point.  There is no disadvantage being on the other side of Livernois or a few streets south of 6 mile.  I would imagine the rentals in the University District the landlords don't take Section 8.

similar size properties :

Home 1

Home 2

Anything approaching $200K is approaching 3000 sq ft.

This a perfect example why investment is difficult in Detroit its more profitable to rent to Section 8 Tenants than Market-Rate.

Rental 1

Rental 2

Rental 3

Being in the University District you do NOT get better schools, services, less crime than the immediate surrounding neighborhoods.  None of those neighborhoods surrounding the UD are like 4820-die, Blightmore, Joy Rd, or Puritan and Greenfield.  I believe some parts of the University District, The Block Club pays for private security patrols, thats mostly along the 7 Mile section I'm familiar with that.

This property though in the University District meets the characteristics  of the census tracks to the south and west than its own neighborhood, or the more exclusive 7 Mile neighborhoods.

Subject Census Track - $38,333 MHHI, 13.4% UE, $447 Median Rent, 31.8 Median Age, 19.9% below poverty

UD Census Tract 2 (east of subject, runs along DGC) - $57,419 MHHI, 13.4% UE, $921 Median Rent, 41.9 Median Age, 8.95% below poverty

UD Census Tract 3 (North of subject)  - $94,153 MHHI, 13.4% UE, $393 Median Rent, 48.6 Median Age, 3.94% below poverty

UD Census Track 4  (North of Curtis) - $67,181 MHHI, 13.4% UE, $940 Median Rent, 47.1 Median Age, .81% below poverty

UD Census Track 5 (North of Margareta) - $92,663 MHHI, 13.4% UE, 38.5 Median Age, .45% below the poverty line 

We have a zero tolerance for illegal drugs.

So we will allow it similar to smoking. none in the house, but outside in designated areas. no growing allowed, or transactions.

 If you can hold the the property, and have it cash-flow it can work. We have a triplex in the City we might unload or refi out the cash.  The key is it cashflows $700/mo, but we can sell it for 90K profit right now.

Or we can refi it and take out $75K in cash, service the debt, increase rents maybe another $400/mo in the next year. Property needs another $30-$40K in work to max the rents.

We got the property did some minor upgrades and got it livable. But that was 30 Months ago, pretty soon, the rents will start falling and so will tenant quality as nicer units hit our neighborhood. We tripled the value very quickly...so its cashout and run or engage in big rehab work.

 I have a property in 48207.  Its empty, I have not touched it for renovation.  I bought it for $600, and I can't justify the $35K cost yet to renovate, its getting closer. Some parts of 48207 have crossed however, people are loading up on 48207 for the "Village" Spillover (Indian and West Village) or the newly branded "North Village".  I'll never call it that it will always be "Kettering" to me.

48208 I do not have property, but the parts that run along 48201 and 48202 are probably expensive and are spoken for.  The stuff heading towards West Grand and Linwood its a little more "Wild West".

It all drive by cash on hand and risk tolerance.

3/4 of that zipcode is a war zone.  The westside of the zipcode is much better.  Without even knowing the address, based on the design of the street, the houses I would guess this house is West of Woodward and North of Puritan, but south of 6 Mile/McNichols.

Good find honestly.

 No I haven't but would love to use it if true.  I have property in Islandview I'm sitting on because I am trying to find funds at a decent rate to rehab. I purchased at Tax Auction in 2016. I would like for it to come online next Spring.  I think my area is ready.

I use them also, and I double checked my rates. You are correct. All my stuff in Detroit is MFH or SFH that have been cut to MFH and are very large (4000+ sq ft) so thats why it seemed low.