This is where the true opportunities are.Detroit, starting with Downtown is experiencing a massive redevelopment, at this point its no longer a secret. 

📊Bruce Kowal, CPA, MS Taxation#RealEstateTax #PassiveActivityLoss #TaxPlanning Hello Bruce, I am actively involved in five rental properties additionally that lately I have been generatingA small amount of taxable income(under 50 K) due to High interest in tax expensesAdditionally In 2024 I 1031 exchanged a rental property for a DST that had done a cost segregation Study.  

Absolutely no amount of due diligence on my part in 2017 would have revealed the negative effect of COVID on the industry.

Do you know your actual amount of taxable profit on the flip?

Additionally, they seem to have a ton of funds (10 I believe) in a very short amount of time, which does raise questions at least for me regarding underwriting an more importantly operation of each funds.

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

I see too many investors now, put a significant amount of money in rehab costs and over leverage themselves on hard money loans with low down payments, their properties are not selling and they are lucky to just payoff their current hard money loan via a DSCR refinance. 

That document will often show you when the plans were approved to build that development of X amount of homes.

Cash flow is defined as the money left over after paying for all expenses, including setting aside a certain amount to cover projected expenses like maintenance, vacancies, or capital expenditures.EXAMPLE:Property Price: $250,000Down Payment (25%): $62,500Loan Amount: $187,500Interest Rate: 6.5%Loan Term: 30 yearsMonthly Mortgage Payment: $1,185Monthly ExpensesMortgage Payment: $1,185Property Taxes: $250Insurance: $100Maintenance (10% of rent): $250Vacancy and CapEx (20% of rent): $500Rental IncomeMonthly Rent: $2,500Total Expenses: $2,285Cash FlowNet Cash Flow: $215 per month 💰However, there are many other factors to consider.

The spring and summer months were about half of that amount between the two of them.