2018 - Prime Time to Invest in Detroit

By many measures Detroit is the most popular real estate market in the country. If you do a quick google search on the best cities to purchase real estate, you'll find Detroit atop many a list. The reason is simple: Detroit provides the best combination of capital gains and high cash on cash yields.

Many investors who start to research Detroit ask the question: "Did we miss the boat in Detroit?" The answer is no. This late 2017 and early 2018 has had the first REAL signs of the recovery and investors only NOW know the trend direction for the city for the first in a decade - i.e. UP.

We present investors with exclusive, under market deals. The deals are normally 25-30% below market values and have an Upside on Purchase. We specialize in finding and securing Distressed, Probates, Foreclosures, Tax Auctions, Sheriff's auction and Short-sales property.
Also, we secure the portfolios of investors (who many a time have not paid their city taxes) as well as home owners (who have an urgent need to sell - ie Divorce etc)

While investors from around the world are flocking to Detroit, many are unsure about where to start. Most importantly, investors want to know where to invest in the sprawling city. With the city's land mass exceeding 140 square miles it's no wonder many first time investors can be overwhelmed when conducting due diligence. This is where our team of 'on the ground' crew and property experts can take the guess work out of the equation and provide you with the most up-to-date, relevant information. We know the city street by street, and monitor trends within micro neighborhoods, not just by zip code. As a general rule of thumb, the best investment neighborhoods in Detroit tend to be those that border the suburbs. We find this to be the case in Bagley, East English Village, Aviation Subdivision, University District, Palmer Woods, Sherwood Forest etc, just to name a few.

It is important to monitor trends to stay ahead of the game and focus on the areas which will provide the best growth potential. One major trend we are witnessing is the upswing in home owner financing in many of the city's top neighborhoods. In the aftermath of the mortgage crisis, banks essentially stopped lending in Detroit. It became a market strictly driven by cash sales. Investors kept the market afloat for several years, along with help from city institutions like the Detroit land bank. Now, we are starting to see tons of comparable sales sold on mortgages in higher end neighborhoods. The more comps, the easier it becomes for the next property to be sold.

It helps that the largest mortgage originator in the United States is right here in downtown Detroit: Quicken Loans. While Quicken founder Dan Gilbert has invested billions of dollars into Detroit's commercial center, his company has been providing a huge boost to Detroit's neighborhoods by lending to homeowners. Properties in neighborhoods like Rosedale Park and Grandmont are selling for well over $100,000, something that felt like a long shot just a couple of years ago. We project that Detroit's premium neighborhoods will continue to climb, notably on the northwest side.
There are also small pockets of the east side that are also witnessing this trend.

What To Avoid In Detroit's Market in 2018 :   

We score a Location based on a scaling model of 1 to 10. 10 being the Best and 1 being the worst. Properties in Location 1 and 2 may never come back. Bad school districts, high crime etc. And your tenants would not pay rents. These are the parts of the city that may never see a Capital Gain in the future. We avoid them like a Plague.

Locations 4,5,6,7 are our Targets for Rentals. Which are "Aspirational suburbs" for good tenants. Here the Neighbors watc out for the community and where the City's population of "Good people" Live. Like School teachers, Hospital workers, Policemen, Firemen, Nurses, Chefs, etc would like to call it their Home.

And Locations 6,7,8,9 are our Flip property categories. Where we can buy under market valued property and turn a Profit through a Retail ready glamorous rehab which then is a Flip.

While Detroit can be a very profitable destination for your investment dollars it is important to invest the right way and to avoid common mistakes. As always, if a deal sounds too good to be true, it usually is. Avoid properties with net yields that seem ridiculously high. A good deal in Detroit should be able to perform at a double digit net yield. So yields of 10-15% are achievable in good neighborhoods. Also, it's important to note that some of Detroit's best neighborhoods aren't necessarily the best areas to invest. Corktown, Midtown, and Brush Park are all booming but property values are sky high. It's wiser to invest in neighborhoods that are on the brink of a major upswing - and we can help you in that profitable journey.

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