All Forum Posts by: Travis Biziorek

Hey Isaura, while I appreciate the indirect shot at me and what I do, it's completely unwarranted.

You don't have to take my word for it though. There's a great thread here on BP with plenty of folks singing our praises: 

https://www.biggerpockets.com/forums/311/topics/1184140-planning-to-start-investing-in-detroit-any-one-use-upside-investments

Detroit is tough to operate in, no doubt. And there are a ton of slimy folks that are wanting to take advantage of OOS investors. Turnkey providers are notoriously terrible in Detroit as well.

I am not one of them, so please stop grouping me in that bucket.

Thanks!

Beyond that, yes I live out of state. But I have a team in Detroit full-time and I travel there 3- 4 times per year. We do literally hundreds of deals in Detroit each year. 

I'm all for people promoting themselves and services as long as it's in a helpful manner and without trying to tear other folks down... especially the people that are operating honestly and going above and beyond every single day.

Clean it up, please.

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.

I guess I'm the rare contact in the rolodex that will give folks the good and the bad.

I help people invest in Detroit and I get paid to do that. 

And I will ALWAYS try and temper folks' desire to run a Section 8 focused strategy. I can speak from experience as I've had my fair share of S8 tenants.

Some have been good, some really bad, and some middle of the road. Overall, I tell people my experience is mixed. I'm always open to S8 tenants but I'm not actively seeking them. And most of the time I'm buying in areas that do just fine attracting non-S8 tenants.

There are a lot of "gurus" out there pushing this as a strategy though, and that's where all this is coming from. It's pitched as easy, guaranteed money on low-entry properties.

The reality, of course, is that's too good to be true. And folks usually have to learn that the hard way.

Hey Rashim, I've worked with a bunch of Canadian investors that purchase in Detroit.

The key is to set up your entity structure so you don't get hit with double taxation.

 Gotcha. That definitely helps explain things, but too messy for me to get involved personally.

Hey Bob, happy to talk all things Detroit and share some great resources about the market.

I invest there from California and own 12-doors in Detroit proper today. 

Section 8 can be ok but comes with risks that a lot of folks don't talk about. Feel free to search the forums or, again, I can send you some resources. I'm going through a Section 8 eviction on one of my home right now.

Detroit is also notoriously tough to analyze. If you're looking at "turnkey" properties under $60k today you're probably in D Class areas. 

Beyond that, there's a lot of nuance. So just be mindful of what you're buying and where, who you're trusting, and make sure you do a bunch of research.

Doug, Detroit is an absolutely goldmine if you take the time to understand it. 

I highly recommend getting involved locally. Start by going to the Detroit Renegades meetup (just Google it). Great folks there at all stages.

What kind of return are you looking for?

Sean, I have some deep domain expertise here.

For starters, I own 12-doors in Detroit (from California). But probably more valuable is my day-to-day experience. I help investors buy ratty houses in Detroit and get them through a rehab with my team on the ground.

I'm not saying that as a plug, I'm saying it because it is the ONLY way I see deals penciling out in the area today. 

You used to be able to buy rent-ready homes and they'd have at least some net positive cash flow. It's very difficult to do that anymore today.

Some people will call BS but I've found 9 times out of 10 those folks are doing their numbers wrong. That could be anything from not accounting for capex/repairs/vacancy in their calculations or a complete lack of knowledge in how to calculate their future property tax obligation (this is a big deal in Michigan).

Just the other day I had a call with an investor looking at a 10-unit property in Detroit. His agent told him property taxes would be $5,000 annually. But we dug in and discovered they would be $24,000 instead. Needless to say, that killed the deal.

So yes, in today's environment you need some value add strategy if you expect to have some net positive cash flow at the end. Honestly, while I haven't been doing this for decades like many folks here, I believe this is likely how real estate investing has always been.

The last ~15 or so years were an anomaly and we may never see easy money like that again.

I have a buddy that's very successful in D Class areas.

He drives around all day putting out fires, getting in literal fist fights from time to time, throwing people out of their apartments or changing locks when they leave, constantly breaking the law because they are "civil matters" and he knows the tenants won't come after him, and shaking folks down for late rent.

I'm sure folks in A Class areas are doing the same, right? LOL