@Michael Oliver
Metro Detroit has what nearly every single investor wants.
Couple hundred bucks a door (after PITI and budget expenses) , double digit ROI, and yes, the prices appreciate and you build equity.
You just have to know how to recognize it.
I cash flow $100k a year off 20 doors. Happy to send a screen shot of the break down to anyone who reaches out. It won’t allow me to attach a pic here.
Hi Joe, I'd love to see a breakdown. Thank you!
Sure thing Raj, I'll send a PM
@Jen Menchaca
Hi Jen,
Absolutely. Our team of 10 investor agents has over 50 clients under contract on investment properties right now. They all cash flow. Getting a mid 7s interest rate right now, cuts out $50 or so if that…but that just makes it something like $200/month instead of $250/month cash flow. Not a huge a deal considering most of the country can’t find it at all.
And right now…most of us are buying with the intention of refinancing “some day soon”.
I have 2 properties under contract to purchase at this very moment. Similar profile to the ones in the rest of my portfolio.
Another vote for Metro Detroit area…
I personally make over $100k/yr cash flow from 16 properties here. All of which, I've purchased only within the last 4 years, mostly off the MLS.
It just works.
Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity.
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 statistically the best market in the country for cash flow.
I cash flow $100k a year off 23 doors and have built a ton of equity in a short amount of time.
Purchase: $80k-$130k
Rent: $1100-$1500 (no rent control in MI)
1% rule: 1%-1.4% rule deals
ROI: 10-14%
Cash flow: $150-$300/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 the the highest rent to price ratio in the country…and we focus on the best balance of price/location within the area.
Here is a picture of my portfolio...
@Ray Choi
Glad you found it helpful Ray.
Yes correct, I run a team of investor friendly agents, invest and manage my real estate, and also have a handyman company that supports the other two.
I'm pretty biased towards Metro Detroit for obvious reasons lol.
HOWEVER, I do personally make over $100k/yr cash flow from 16 properties here. All of which, I’ve purchased only within the last 4 years.
So I do practice what we preach, and it really freaking works.
Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity.
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 statistically the best market in the country for cash flow.
I cash flow $100k a year off 23 doors and have built a ton of equity in a short amount of time.
Purchase: $80k-$130k
Rent: $1100-$1500 (no rent control in MI)
1% rule: 1%-1.4% rule deals
ROI: 10-14%
Cash flow: $150-$300/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 the the highest rent to price ratio in the country…and we focus on the best balance of price/location within the area.
Here is a picture of my portfolio...
https://www.neighborhoodscout.com/mi/detroit/real-estate#:~:....
>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
I suspect it comes from the historically poor appreciation as reflected in neighborhoodscout data and that the population has decreased ~60% from its high. Shrinking population is something that would concern me if I was a property investor in Detroit.
note I am not anti Detroit. I am anti inaccurate data so please provide the source of your data.
Hi Dan,
My sources are typically the MLS. I'm not sure where your source gets its data, however, I'm directly pulling data from posted sales in the MLS.
I think the biggest misunderstanding here is that I’m referring to “Metro Detroit” and my primary target markets, when I’m stating those stats.
For example: "Price $80k-$130k". Clearly that isn't Detroit's data, or Michigan's average price range….that's MY target price range. And so within those locations, the appreciation has been 3-10%+ per the MLS data I've pulled. Note: none of my properties in my portfolio have a Detroit address. They're all in a city near Detroit. So for example. Redford. I have multiple properties there. Attached is a screen shot of the example of the data I pull from the MLS. 18% appreciation for the past 10 years. Which is what I said it was. Now, skewed by 2008? Absolutely. I never said it wasn't. I assume people make that correlation, since I say "last decade". (Yes data posted to 2022, I made this a while ago and haven't updated)
I’m also slightly confused about your source. Even if I was talking about Detroit…my statement says 3-10%+ in the past decade…when I look at your source, neighborhood scout, for Detroit it shows an average annual rate of 6.3% for the past 10 years…that actually seems to validate my claim. Am I reading this incorrectly or does the source validate my claim of 3-10%+ for the past decade?
If looking at a shorter horizon (2023)
Here is a recent article for 2023:
https://www.newsweek.com/home-prices-rise-11-cities-2023-ends-1855600
Newsweek 90 appears to be based out of New York and pulling data from the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.
I’ll quote:
“Detroit saw the highest jump in home prices, according to the S&P CoreLogic Case-Shiller national home price index, in what was the ninth straight month of price gains for the market, illustrating the challenge of affordability for buyers dreaming of owning a home.
The Michigan city saw a more than 8 percent jump in prices in October, the highest of the 11 major metropolitan areas that saw increases. Miami, Atlanta, Chicago, Boston, Detroit, Charlotte, New York and Cleveland hit all-time highs in prices, according to the S&P CoreLogic Case-Shiller data released on Tuesday.”
Many “appreciation markets” went backwards in 2023….While Detroit went forwards… Real Life > Narrative.
This actually impresses me. Detroit Weathered and thrived in 2023 better than any other market. Wild. My theory is affordable housing. Houses are still affordable and not as inflated, so more room for growth vs other inflated markets.
As for your comment about shrinking population of “Detroit”. I’ll make a few comments yourself or others may find insightful.
Again, I’m referring to Metro Detroit. Metro Detroit is typically considered to consist of the Tri-county area. Oakland, Macomb, and Wayne County. Detroit resides in Wayne county. So people very often (as you did) look at Detroit, and/or Wayne county, see the recent decline and peace out. Fair enough. However, Oakland and Macomb (per the recent US census, that I studied a while back) both are posting Population Increases. And same thing if you look into the other cities of Wayne county. Detroit Skews the data. So as an investor here, it doesn’t particularly bother me that Detroit has gone on this roller coaster ride since the other areas are showing very positive signs.
Is the recent appreciation data/success above most likely because the market previously dipped 50 years ago and then again in 2008? Sure, maybe, probably…but that big dip of the auto industry, riots and the 2008 crash have came and gone…so its would be more far fetched to think another big dip of similar type would be coming rather than the market has stabilized and it setting new patterns for growth. (It’s more likely the market continues on it’s recent pattern than to expect it to dip like it did in the past because those variables are gone/irrelevant now)
If you want to pick apart a statistic, I’ll make it easy for you.
“Metro Detroit has was 99% of real estate investors want…”
THIS stat is completely bogus and made up lol.
However, I do still think Metro Detroit has what MANY investors ARE actually after.
Think about it from this perspective…
My portfolio comes with the following:
Average purchase price of $104,897
I’ve only been buying since 2019
IF* my specific properties appreciate at only 3% per year and rent increases at only 2% for the next 30 years…I’ll have a portfolio that is completely paid off and is worth $7,876,466 and cash flows $437,232 a year. Good enough for me.
I would think it would be very tough elsewhere and arguably easier here in Metro Detroit to match these numbers. Referring to Average purchase price, cash flow, and future paid off value.
Another MLS sourced Stat:
Year over year (December to December) the data in my MLS, (realcomp which consists of all of Metro Detroit with a heavy focus in Metro Detroit) Detroit has posted 8.3% appreciation.
December 2022 Median Price: $216,000
December 2023 Median Price: $234,000
2023 year over year (when many other markets tanked) was about 4-7% positive.
Source: Realcomp MLS
I’ll keep dumping my money here, enjoying my cash flow, and hope that in 30 years I’ve enjoyed a little appreciation and sitting on a cash flow monster. But not going to twist anyone else’s arm to do the same.
At this point I’m just rambling lol so I’m out…hopefully helpful to yourself or at least someone!
@Ghenia Flewellyn
Hi Ghenia, thank you! Yes, I can send you a direct message.
@Sandra Morrison
Glad to hear is Sandra!
I'm pretty biased towards Metro Detroit for obvious reasons lol.
HOWEVER, I do personally make over $100k/yr cash flow from 16 properties here. All of which, I’ve purchased only within the last 4 years.
So I do practice what we preach, and it really freaking works.
Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity.
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 statistically the best market in the country for cash flow.
I cash flow $100k a year off 23 doors and have built a ton of equity in a short amount of time.
Purchase: $80k-$130k
Rent: $1100-$1500 (no rent control in MI)
1% rule: 1%-1.4% rule deals
ROI: 10-14%
Cash flow: $150-$300/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 the the highest rent to price ratio in the country…and we focus on the best balance of price/location within the area.
Here is a picture of my portfolio...
I've seen quite a few investors achieve FIRE through REI. REI is by far the best vehicle to do so.
Personally, my portfolio here is to that point..making over $100k/yr cash flow from 16 properties here. All of which, I’ve purchased only within the last 4 years.
Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity. It statistically has the best price/rent ratios in the country...so it's arguably the "easiest" place to execute FIRE.
Some people don't like Detroit.
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 statistically the best market in the country for cash flow.
$100k a year and also built a lot of equity which opens up a lot of doors as well.
Here is the primary target...
Purchase: $80k-$130k
Rent: $1100-$1500 (no rent control in MI)
1% rule: 1%-1.4% rule deals
ROI: 10-14%
Cash flow: $150-$300/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.
Detroit has the the highest rent to price ratio in the country…and we focus on the best balance of price/location within the area.
You may have noticed our name is literally FIRE lol.
Questions:
1) Best price/rent in the county. Easily beats the 1% rule and cash flows
2) Taxes pencil out fine and deals cash flow
3) Michigan is considered a swing state..Detroit isn't notably hard on landlords. No rent control, you can evict as needed. It's likely not an easy thing to do anywhere, but can be done.
4) No notable natural Disasters
5) A dozen fortune 500 companies. See notes above
6) We target $80k-$130k (for SFH)
Here is a picture of my portfolio...
*To answer your question directly*, it's slightly hard to name the locations especially within the city, but Mike will be able to talk through these locations with you today when you guys connect. The suburbs are great and there are some specific tools to finding up and coming areas in the City.
Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity.
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 statistically the best market in the country for cash flow.
I'm pretty biased towards Metro Detroit...HOWEVER, I do personally make over $100k/yr cash flow from 16 properties here. All of which, I’ve purchased only within the last 4 years. I've also built and seen others build a lot of equity in that time.
Purchase: $80k-$130k
Rent: $1100-$1500 (no rent control in MI)
1% rule: 1%-1.4% rule deals
ROI: 10-14%
Cash flow: $150-$300/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.
A little more about the area:
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 and sounds like you're aware to look for a slightly better property yourself already.
Detroit has the the highest rent to price ratio in the country…and we’ve found the best balance of price/location within the area.
Here is a picture of my portfolio...as you will see. Very close to what you're looking for...but also note...the ARVs are all closer to $100k+ at this point.
