All Forum Posts by: Isaura Orellana

Hi Krystan! Welcome to BP…

If you're just starting out and looking for single family investment rentals with excellent cashflow, rent to value ratio and appreciation that are above the 1% rule, Detroit Michigan housing market has been on a strong consistent upswing with loads of potential for the passed decade and a half.

Manufacturing, clean energy, AI, and infrastructure are attracting global capital, with Detroit back on the map as a high-growth hub.

Additionally, Detroit was recently named the number one most undervalued housing market in the U.S.

The Comback City also just ranked second in the nation for average home price increases since the pandemic.

And if you’re looking for solid turnkey properties at good prices, you’re in luck because we are just finishing up a handful of single family rentals and duplexes.  My husband and I own a turnkey operation here in Detroit. We’ve built close to 100 investment properties in the past 6 years as well as tenant them section 8 for out of state and out of country investors just like you.
So, If you think Detroit may be the market for you feel free to send me a message .

BRRRR.. Cheers!

Quote from @Jay Hinrichs:

Quote from @Travis Biziorek:

Quote from @Gurleen B.:

Quote from @Travis Biziorek:

Detroit has been on the upswing for over 10-years now.

This will just be fuel to the fire!

 If I am not mistaken, property values in Detroit have increased 300% since 2017!

Sounds about right, yes. But you have to consider it was starting from a very small base.

exactly in 2009 houses in C D areas were trading for 5 to 20k.. 

Quote from @Jay Hinrichs:

Quote from @Isaura Orellana:

Wow, Jay. Saying something upbeat and positive about the possibilities and future of the Detroit market? I’m flabbergasted. You’ve been one of Detroit’s biggest critics on BP since my husband and I began turning water into wine, building SFRs and MFRs in Detroit six years ago, and I started dabbling on the platform.

First off, the rebirth of Detroit began around 2008–2009. Not sure how you missed the memo on that one. But it would indeed be epic and huge for Motor City, or “Comeback City,” as we like to call it.

And yes, Trump’s tariffs could absolutely turbocharge the Detroit auto industry and breathe new life into the city’s historic factories. Trump says a lot and does a lot, but advocating to bring back the auto industry to Detroit has consistently been one of his top 10 to 20 priorities since he came down that escalator. One might even argue it was a campaign promise during the last election cycle.

Let’s not forget Trump’s Treasury Secretary, who helped orchestrate the tariffs, is widely regarded as one of the most highly respected macro hedge fund managers in the world.

Not only are interest rates projected to drop significantly, but due to those same tariffs and broader economic policy, he’s already maneuvered $3 to $5 trillion in investment commitments that have flowed into the U.S. since taking office—yes, trillion.

Manufacturing, clean energy, AI, and infrastructure are now attracting global capital, with Detroit back on the map as a high-growth hub.

Additionally, Detroit was recently named the number one most undervalued housing market in the U.S., followed by Cleveland, St. Louis, Philadelphia, and Oklahoma City. The Big D also ranked second in the nation for average home price increases since the pandemic. The stage is set.

Winter is just now wrapping up here. It’s been long and cold, but we Michiganders (or Michiganians) weren’t phased. Life went on, and the building never stopped. Construction remained strong and steady, as usual.

As for whether we can get the factories up and running in a reasonable timeframe, sure, Gretchen may kick and scream and be a minor obstacle at first, but she’d be writing herself a one-way ticket out of Michigan if she didn’t fully embrace an opportunity of this magnitude for the strong-spirited people of Detroit and Michigan.

And honestly, it wouldn’t surprise me in the slightest if Trump’s close friend Elon, or other major players, started expediting the development of one or more facilities in Detroit, similar to what was done in Texas. I mean, it’s just common sense.

When it comes to smart purchasing near strong school districts, hospital access, and proximity to revitalized areas, Detroit is full of promising zones. Look at the fringes of so many historic districts: Dexter-Linwood with its massive revitalization in 48206 and 48238. Not to mention 48204 off Grand River, 48227 off Greenfield, Indian Village, 48224 in Morningside and East English. Not to mention Hamtramck, Dearborn, Dearborn Heights, Birmingham, Farmington Hills, Clinton Township and the list goes on.

Deals, deals, and more deals are happening throughout Detroit and Metro Detroit.

Detroit is BRRRR heaven.

lets set the record straight I warn people about C class which is probably D class and D class in all cities and Detroit has a ton of it and investors tend to not understand the risk .. they just look at their spread sheets and pick the highest returns.. I know there are great areas of every city Detroit included.. My concern with Detroit is the existing man power and their ability to actually get back in the Job market.. 

Points well taken, Jay. That said, I do recall that six years ago, while I had a post running as a top topic for seven days, you had some rather harsh words for Detroit. Perhaps it was an off day, or as you mentioned today, maybe you had experienced some fallout there following a solid decade-long run. In hindsight, I also may have failed to recognize that your intention was to educate newer or less experienced investors. Or perhaps I, too, was having an off day and missed the point. Fair enough.

Detroit’s economic outlook is largely expected to improve over the next few years as the city recovers from recent labor market challenges. If even a few of the legacy auto plants begin ramping up production again, that would be the icing on the cake. - Epic for all.

According to economists’ forecasts, by 2029, Detroiters’ average wages are projected to reach 53.3% of the average wage earned in city-based jobs. While that still reflects a notable disparity, it would be the smallest since these data sets began in 2010, according to Gabriel Ehrlich, co-author of the report and director of the University of Michigan’s Research Seminar in Quantitative Economics. “Fortunately,” Ehrlich noted, “we project the elevated inflation and high interest rates of recent history to give way to modest but steady gains in employment and real incomes.” (Pre-Trump tariffs era.)

Though Detroit’s housing market performed strongly, residents faced some challenges in 2024 as employment declined. However, economists from the University of Michigan expect the city to return to growth this year, supported by easing monetary policy and moderating interest rates. Wages are also expected to rise in 2025 and the years ahead, indicating a broader return to workforce participation—perhaps more so than at any point in the past decade.

While the housing market remained bullish, some of Detroit’s labor market struggles in 2024 were in fact due to high interest rates and sluggish vehicle sales. Nonetheless, the city’s unemployment rate has dropped significantly compared to the early days of the pandemic.

Urban centers like Detroit and its surrounding suburbs are projected to continue experiencing price growth and rising demand.

As Karen Kage, CEO of Realcomp II Ltd., noted in a recent news release: “The city of Detroit continues to be a bright spot for residential real estate, with pending sales at their highest November levels since 2021.” Pending sales rose to 535 in November, up from 386 in the same month in 2021. “This underscores what our Realtors continue to report: higher-than-usual activity, especially for this time of year.”

Urban and suburban areas around in and around Detroit continue to attract families and professionals seeking a balance between suburban comfort and urban convenience. In November, the median sales price in the city of Detroit was $94,500—an 18.1% year-over-year increase.

Other areas saw even stronger gains. Grosse Pointe Park recorded a median home sales price of $490,000 in November, up 15.6% from the previous year. In Brighton (Livingston County), the median sales price surged to $427,450—a 29.5% increase.

Detroit has leapfrogged many other cities in national surveys of real estate professionals for its investment potential and development opportunities. Commercial real estate forecasts for the city are especially optimistic going into 2025.

There’s also strong momentum in the multifamily market. Only two U.S. cities currently have apartment rents rising faster than Detroit. This upward trend shows no signs of slowing, providing good news for property owners and investors alike.

Finally, on a closing note: Detroit’s own Dan Gilbert—who has played a major role in and profited from the city’s impressive 16-year resurgence—recently made headlines again. Just four weeks ago, his Rocket Companies announced a $1.75 billion acquisition of real estate brokerage Redfin.

Wow, Jay. Saying something upbeat and positive about the possibilities and future of the Detroit market? I’m flabbergasted. You’ve been one of Detroit’s biggest critics on BP since my husband and I began turning water into wine, building SFRs and MFRs in Detroit six years ago, and I started dabbling on the platform.

First off, the rebirth of Detroit began around 2008–2009. Not sure how you missed the memo on that one. But it would indeed be epic and huge for Motor City, or “Comeback City,” as we like to call it.

And yes, Trump’s tariffs could absolutely turbocharge the Detroit auto industry and breathe new life into the city’s historic factories. Trump says a lot and does a lot, but advocating to bring back the auto industry to Detroit has consistently been one of his top 10 to 20 priorities since he came down that escalator. One might even argue it was a campaign promise during the last election cycle.

Let’s not forget Trump’s Treasury Secretary, who helped orchestrate the tariffs, is widely regarded as one of the most highly respected macro hedge fund managers in the world.

Not only are interest rates projected to drop significantly, but due to those same tariffs and broader economic policy, he’s already maneuvered $3 to $5 trillion in investment commitments that have flowed into the U.S. since taking office—yes, trillion.

Manufacturing, clean energy, AI, and infrastructure are now attracting global capital, with Detroit back on the map as a high-growth hub.

Additionally, Detroit was recently named the number one most undervalued housing market in the U.S., followed by Cleveland, St. Louis, Philadelphia, and Oklahoma City. The Big D also ranked second in the nation for average home price increases since the pandemic. The stage is set.

Winter is just now wrapping up here. It’s been long and cold, but we Michiganders (or Michiganians) weren’t phased. Life went on, and the building never stopped. Construction remained strong and steady, as usual.

As for whether we can get the factories up and running in a reasonable timeframe, sure, Gretchen may kick and scream and be a minor obstacle at first, but she’d be writing herself a one-way ticket out of Michigan if she didn’t fully embrace an opportunity of this magnitude for the strong-spirited people of Detroit and Michigan.

And honestly, it wouldn’t surprise me in the slightest if Trump’s close friend Elon, or other major players, started expediting the development of one or more facilities in Detroit, similar to what was done in Texas. I mean, it’s just common sense.

When it comes to smart purchasing near strong school districts, hospital access, and proximity to revitalized areas, Detroit is full of promising zones. Look at the fringes of so many historic districts: Dexter-Linwood with its massive revitalization in 48206 and 48238. Not to mention 48204 off Grand River, 48227 off Greenfield, Indian Village, 48224 in Morningside and East English. Not to mention Hamtramck, Dearborn, Dearborn Heights, Birmingham, Farmington Hills, Clinton Township and the list goes on.

Deals, deals, and more deals are happening throughout Detroit and Metro Detroit.

Detroit is BRRRR heaven.

Hi Natalie! You asked about mitigating risks when owning property in Detroit..

The biggest factor to help mitigate risk in Detroit for property owners is hands down without a doubt to find TRUSTED BOOTS ON THE GROUND to help you navigate, minimize or eliminate risk. And this goes triple for Out-Of-State investors. Let those with established expertise and learned and earned know how steer the ship for you or with you. My husband and I ran into all sorts of low risk, medium risk and high risk situations buying, rehabbing, tenanting section 8, managing and owning and selling close to 100 properties in the passed 6 years. We actually started off wholesaling and doing BRRR's out of state from California and then moved to Birmingham (20 min from Detroit) and than Darren my husband would drive to and from Detroit every day working 16hrs a day 365 days of the year for 1/2 a decade owning, building, managing section 8 tenants while I helped him on the other side of things and together we weeded through all sorts of risk over the years. All this gruelling work , commitment and consistency though has groomed us into advanced or highly experienced Detroit section 8 property investors/owners/sellers/turnkey providers, operators, managers and BRRRRer's that has enabled us to see risk coming a mile away and than wether we need to steer clear of it all together or perhaps wether it's worth entertaining that risk for reward.

Your welcome to send a message if you need any other advice on risk in Detroit. Cheers!

Quote from @Vinay Sanapala:

Hi, all! Appreciate the amazing insight and support you all provide

I'm looking to build a Section 8 portfolio and looking for some guidance from those who have done it.

Some details:

My personal mission is to take care of Veterans and families who are not able to take care of themselves. 

I have about $200K to deploy. Goal is to get to 1 Section 8 property, then 5, then 15, then 50. Timeline contingent on good deals. Looking to invest out of state (TX is no good with its high taxes). Areas that interest me are the Midwest and Southeast.
-Any mentors you recommend reaching out to?
-Got markets to target? Where have you been successful? Less successful?
-How do you analyze what a good deal is to put in an offer for a Section 8 property?
-Got a trusted realtor who understands Section 8?
-Got inspectors who accurately captured the issues with home(s)?
-Got lenders who do DSCR loans? (I have no interest in owner financing)
-Got contractors who know how to get a home to Section 8 code?
-Got a Property Management company with significant experience with Section 8 homes?

Any tips, tricks, or best practices you wish you knew when starting out?

Stay blessed. I appreciate every single one of you.

Hi Vinay , Welcome to BiggerPockets and congratulations on your mission to use real estate to take care of others. In Detroit we like to call this a WINWIN …. We have proudly built, renovated and turned over close to 100 SFR's, Duplexes, Triplexes, Quadplexes and housed close to 150 section 8 families and Veterans in Detroit. We pride ourselves in specializing in all things section 8 and we have found housing section 8 tenants and Veterans in Detroit rental properties to be very lucrative with the government guaranteed rent and very rewarding at the same time in knowing we provided and managed excellent affordable housing to Veterans and families in desperate, uncomfortable and sometimes even dire situations. Some of our renovation were cosmetic rehabs , many full gut rehabs and some in betweens but we always went one step further to make certain the property was beautiful and in full compliance with section 8. The last time we failed a section 8 inspection was approximately 30 properties ago and then passed our second inspection on that failed one with flying colors a few weeks later. We have long outstanding relationships with the best of the State (MSHDA) run section 8 agencies in Detroit. I noticed some people in this thread turned there nose up on section 8 and lower class neighborhood rentals but in Detroit THE ONLY way to go is section 8 and anyone that tells you different when it comes to Detroit is totally full of it and getting less than 1/2 of market rent if there lucky. One learns very quickly and unfortunately usually the hard way that cash tenants are a huge gamble and that section 8 is the only way to find healthy, consistent, positive cash flow in Detroit and many of the other inner cities accross America. A few other great advantages to section 8 outside of knowing that rent gets wired directly to your account on the monthly like clockwork or in the case of Neighborhood Legal Services a check lands in your mailbox monthly like clockwork, is that section 8 is Covid proof. Also, through certain programs sometimes we are even able to negotiate higher than market rent. You can also raise rent each year to the following years current market rent. Less vacancy with section 8 as well. Fewer evictions. High demand for section 8 housing in Detroit. Section 8 leads to increased profitability. Furthermore, there are annual inspections that take place as an added checkmark for owners/landlords/managers to make sure everything is working with the property as it should. Also, when buying section 8 rental properties via DSCR loans , section 8 is looked upon favorably by banks/lenders. We've been on the receiving end of about three dozen DSCR loans in the passed three years here in Detroit. I'm a big fan of DSCR lending. Sure the million dollar suburbs are nice if you have that kind of money and are playing the larger appreciation game but dollar for dollar pound for pound when it comes down to rent to value ratio its difficult to find the same kind of cash on cash returns section 8 rental properties offer in Detroit. If you have any other questions regarding housing Veterans or Section 8 participants feel free to reach out. All the best in your investment endeavors! Cheers, Isa.

Quote from @Imani Naomi:

Hello Everyone, 

I am looking to purchase my first rental property in Detroit. I am interested in using private money lending to make it happen. I have been studying for my real estate degree for the past 3 years and would love to get my feet wet. I am hoping to get some advice from those who have gone down the "private money lending" path before. 

What are some of the best practices for finding and approaching private money lenders? Are there specific things I should look out for or avoid? Any tips on structuring deals or ensuring a smooth process would be greatly appreciated?

Thanks

Hello Imani, my husband and I have been building big beautiful brick properties day in and day out in Detroit for the passed 5 years straight and I’m proud to say we are experts in all aspects of building and maintaining successful rental properties in Detroit City.  If your looking for the least amount of risk and biggest bang for your buck I would look for a company that is a reputable turnkey provider thats actually in Detroit and offers things such as an efficient boots on the ground team, all sorts of established local relationships, solid in-house management, an operation that is highly skilled and well versed in section 8, a company that has proven relationships with both out of state and local lenders. (Not to say its there might not be very capable lenders here on BP as well.) This way you know you are in good hands and that it will take minimal involvement from your end on all aspects of your investment. Definitely the way to go on rental properties if you are an out of state investor NOT looking for an enormous undertaking with a BRRRR type scenario or investment of that nature or part time or full time job. If you want to minimize risk and capitalize on investment with passive income and stable cash flow this is the rental property strategy that is most advantageous and works best in Detroit. I also highly recommend going with a section 8 government guaranteed rental property. A nice SFR (single family rental) brick home or perhaps a duplex but for your first purchase actually, wise to just stick with an SFR to keep it real simple. Why do complicated when out of state!?..If you would like to discuss more Imani feel free to reach out. Happy Hunting!

Quote from @Frankie Paterno:

Good Morning,

What areas are still cashflowing and I can scoop up and hold? Is Ohio/Indiana/arkansas over-saturated now? Looking to network with realtors and investors in the game! Cash ready. 

Hi Frankie, If your looking for the biggest bang for your buck there’s strong section 8 government guaranteed Cash Flow all over Detroit. Plus many of the homes, duplexes, triplexes and Quads are monster gorgeous brick properties that dwarf most of the other homes offered in some of these other cash flowing states. Just make certain to build a relationship with a reputable turnkey operation who treats the city like it’s there own backyard, specializes in section 8 and has in-house management as well as day in and day out boots on the ground crews, etc. If you would like to discuss more feel free to reach out. Cheers!

Quote from @Kristi K.:

Quote from @Isaura Orellana:

Haha, thx, you just made this 63 year old kids day. 

Haha, glad could help! ;)

Quote from @Kristi K.:

Quote from @Isaura Orellana:

Quote from @Travis Biziorek:

Hey Richard, I'm doing a lot of them in Detroit still (and I live in California).

Detroit still has cash flow, although it is getting increasingly difficult to find. The best way to find deals is to add value via a BRRRR type strategy. This is what I help out of state investors do with my team on the ground in Detroit.

We're generally seeing SFH's in the $80k-$90k range all in and duplexes in the $110k-$130k range. Then we're seeing appraisals from $100k - $120k on SFH's and $150k+ on duplexes.

I literally had a client email me yesterday. His duplex appraisal came in at $206k and he was in for $160k total. Not bad!

In terms of net cash flow, you'll see anywhere from $100 - $200 per door. And it can definitely go lower if you have a high equity deal (e.g. that duplex I just mentioned). 

I'm in the camp where I'd rather get as much of my capital back as possible and operate closer to break even.

It should be noted that net cash flow includes all expenses... that means a line item for capex/repairs/vacancy as well (lots of folks don't do this in their numbers).

Finally, I can talk for hours about Detroit. The city is crushing it and going through a major revitalization. I personally own 12-doors there and I'm under contract for another duplex currently.

I've been buying there since 2019 and I have some decent equity in my properties. I'm starting to do cash out refi's on them to buy more.

Happy to talk any time or share a bunch of resources about the market there.

If I had a nickel for every out of state investor who came to the Detroit market to attempt to do a BRRRR or got into bed with folks claiming it’s a viable way to succeed in the Detroit rental market if they hired them to help in a direct or non-direct manner and fell on there face I could build another couple dozen rental properties on top of the couple dozen we build in Detroit every year. It’s one thing to come do it yourself and stay in the city to oversee the construction/rebuild of your rehab it’s a whole other trying to oversee from OOS or OOC full time or part time for that matter. Or even worse paying someone else who resides Out of State to oversee your rehab lol. Our clients appreciate that we lower they’re risk on investment drastically because we are in fact the company that built they’re property, and we’re the one’s that are familiar with it, we’re the actual boots on the ground team and we’re the actual in-house management team. Finding contractors in Detroit that aren’t going to take advantage of you and your investment and sink your BRRRR or eat up most of your profits and put you under water is extremely challenging as well. Just another big reason our clients are thankful for our large number of our trusted skilled workers and tradesman that have been with us for years. Again, I HIGHLY recommend when doing the BRRR Strategy in Detroit or anywhere else for that matter to make certain that you reside nearby your rehab or at the least In-State and not accross the country. Happy to chat anytime or share more thoughts on the market.

OOS = Out Of State

OOC = Out Of Country

The BRRRR strategy or method is a real estate investment method that involves buying, fixing up, renting out, and refinancing properties to build a portfolio and generate passive income. BRRRR stands for "Buy, Rehab, Rent, Refinance,

You forgot the last R - “Repeat”

Uh-Ohhhh …your one of those kids lol.. Anyways, 1 typo doesn’t change the overall message but thanks sweetheart.