All Forum Posts by: Joe Hammel

Quote from @Austin Wolff:

Quote from @Joe Hammel:

Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, solid ROI, and yes plenty appreciation. (#1 appreciating city 2023)

I personally make well over $100k/yr cash flow from 21 properties here. All of which, I’ve purchased within the last 4 years.

There are 2 types of people who dog on Detroit..

1. People who don't actually own property in Detroit

2. People who did it wrong and weren't able to execute.

If you do it right, it’s arguably the best market to invest.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: .9%-1.4% rule deals

Coc ROI: 5-12%

Total ROI: 20-40%

Cash flow: $50-$250/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties in poor condition, because they pencil out to 2-3% deals on paper. We don’t buy those.

We have found what works and repeat it as much as funds allow.

Detroit has one the highest rent to price ratios in the country…and we focus on the best balance of price/location within the area.

Here is a picture of my portfolio if you/anyone is curious.

 Wow Joe, this is absolutely incredible, thank you for sharing. For your Taylor property on Cornell (purchased 2023), the loan is higher than the purchase price (I'm assuming to help cover the rehab). What kind of loan did you use? Would you consider that town a "B" place or a "C" place?

 Glad you liked it Austin. Cornell actually was a brrrr. So that's my new mortgage after the refinance post rehab. That's why the cash flow is low on that one, because it has a bigger mortgage.

For the most part I consider Taylor to be B class. Great market. 

Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, solid ROI, and yes plenty appreciation. (#1 appreciating city 2023)

I know many investors that have house-hacked with your exact criteria and done really well. 

It's a great market to grow your investment portfolio afterwards if you choose to do so.

I personally make well over $100k/yr cash flow from 21 properties here. All of which, I’ve purchased within the last 4 years.

There are 2 types of people who dog on Detroit..

1. People who don't actually own property in Detroit

2. People who did it wrong and weren't able to execute.

If you do it right, it’s arguably the best market to invest.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: .9%-1.4% rule deals

Coc ROI: 5-12%

Total ROI: 20-40%

Cash flow: $50-$250/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties in poor condition, because they pencil out to 2-3% deals on paper. We don’t buy those.

We have found what works and repeat it as much as funds allow.

Detroit has one the highest rent to price ratios in the country…and we focus on the best balance of price/location within the area.

Here is a picture of my portfolio if you/anyone is curious.

If you call the city rental inspections division 586.574.4633 they should be able to direct/send you the packet they send out for rentals. They actually will usually automatically send it to you after you close and they figure out it's a rental. 

Couple forms, $200 and an inspection. Good for 2 years. 

They're somewhat picky, kinda depends on which inspector you get and what mood they're in. If you or someone can be there for questions it seems to be a little smoother.

Biggest thing is to try and have the place decent. If they smell "slumlord" you'll get hammered. For the most part its just health and safety items, which are items we should have remedied anyways.

As someone else mentioned, biggest thing to avoid is having the house tagged as vacant which the city will do if it sits empty for too long (handful of months, grass not cut, etc). This inspector is pretty in-depth and they'll like find a lot of items.

Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, solid ROI, and yes plenty appreciation. (#1 appreciating city 2023)

I personally make well over $100k/yr cash flow from 21 properties here. All of which, I’ve purchased within the last 4 years.

There are 2 types of people who dog on Detroit..

1. People who don't actually own property in Detroit

2. People who did it wrong and weren't able to execute.

If you do it right, it’s arguably the best market to invest.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: .9%-1.4% rule deals

Coc ROI: 5-12%

Total ROI: 20-40%

Cash flow: $50-$250/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties in poor condition, because they pencil out to 2-3% deals on paper. We don’t buy those.

We have found what works and repeat it as much as funds allow.

Detroit has one the highest rent to price ratios in the country…and we focus on the best balance of price/location within the area.

Here is a picture of my portfolio if you/anyone is curious.

 Sure, sending you a DM now Steven

 Sure Chris, sending you a direct message now.

Sure I can send you something, Clare. I'll send you a direct message!

 ah makes sense! 

Yeah that map is a great starting point and something to double check areas with if new to the area...we work a little more on a street by street, neighborhood basis, so it's gets a little more specific.  For example...that map has some very nice areas of Detroit (expensive neighborhoods) as red...so if i had to guess, I'd say that one is just a bit generic. 

 Thanks!! @Kiran Reddy

Eastpointe is actually one of my favorites. What gives you the impression of high crime there? I'm under contract on another one in eastpointe right now.

Sometimes its hard to look at a location as a whole, but every property we buy we look at the specific location. Some we will buy some we won't. 

While it's not a huge data sample, we haven't had any issues with crime...well i guess one time someone vandalized one of garage doors (in a pretty nice area actually)...nothing earth shattering. And for the most part people pay their rent without too much issue. (knock on wood) 

As an investor you almost inevitably will deal with some issues. Annoying tenants, late payments, occasional not paying, leaving and leaving the house a mess, bad contractors, bad PMs, etc...there's an extent of that, that is "normal". 

The comparison is, IF* one decides they do want to invest in real estate....where/how is the best way to do it. We are happy with where/how we chose.

Hopefully helpful!