I realise that detroit has a declining population though I have still put contracts on 3 houses in the East of Gratiot Rd area.
I can`t get a real clear picture of what the area is like in general.
Can anybody steer me in the right direction?
The houses are in Flanders and Whithorn Streets.
Thanks a lot
you didnt mention any numbers about the property.
regardless, looking at the macro-economic picture,
detroit has had negative population and job growth for nearly 20 years.
also the median income has been declining during this period.
i would not be doing any buy and hold in this market. i would rather create an interest list of potential “buyers” or rent-to-own tenants and do sandwich leases.
get this book if you dont know anything about sandwichleases
The figures on these are: Buying at $87K, $87K and $80K.
Rental of around 700 to 1000 p/month per property.
Reason for purchase is to develop FICO score ASAP to quickly go on to better ventures.
Being from Australia, I have no US credit history at all.
I will hold but not for an extended period.
we’re from the flint area, about 1 hr. north of detroit. flint, like detroit has many depressed areas. i have found in these areas its ok to invest for a monthly cash flow but its not like investing in the suburbs where we invest mainly for future retirement. you might want to try the low to medium income suburbs…thats what we do in flint area and have done quite well. dont buy anywhere that you cant physically collect the rent if need be.
we have drove by potential purchases in flint where big men are walking around with bats and pitbulls for their protection, we just keep driving.
I can`t collect the rent personally as I live in Australia, therefore I require a good property manager.
Not sure how busy the airport west of Gratiot is though and what effect on closeby residences it has?
I went thru Detroit do you think the decline in the population has anything to do with the incline in gunshots? Hmmmmm
I agree with niravmd its more about the numbers then the area
P.S. I was just kidding about the gunshots!!!LOL
if you live in australia, why buy in detroit to begin with?
there are many cheap areas you can buy. san antonio texas is one. its safer,nicer, probably just as cheap and will go up atleast 1-2% over detroit.
try out that www.bestplaces.net it might help you! I like it in Denver personally and I own property in four states.
I am just trying to figure out why someone who lives on the other side of the planet would invest here? There are no good cash flow properties in Australia? I mean it just doesn’t make sense to buy into the worst parts of the US if you are so far away. Investing in Detroit is like investing into Buffalo or Camden, even the local cops are affraid to ride down some of the streets!
i agree with that. i’ve never been to detroit, but its a lousy place to invest in.
I recently let a deal fall over in Queensland because I couldn`t get Mortgage Insurance for my 80% borrowings.
This is as cashflow positive as you can get in Australia:-
3 bedroom timber home in sugar cane growing town for $93,000
Has a tennant in place who is currently paying $120 per week and is prepared to go up to $135 p/week.
Taxes and insurance of approximately $2000 p/year
Also payable on the purchase is stamp duty of $980 going to the Government.
Our interest payable on borrowing $$ is 6.5% at the moment.
If you crunch these figures you will see what sort of cashflow we can get here.
are you planning on paying cash? if not, how do you expect to qualify for properties in the US?
I live in Center Line, MI which is about 8 minutes from Detroit. Gratiot is very close by and I can honestly tell you to avoid investing in most locations in Detroit. There are plenty of areas in the Detroit suburbs that are worth while persueing, but areas such as Detroit, Pontiac, and Hazel Park are saturated with REO and HUD homes.
And if you were to purchase a house in detroit, 85k is probably way too high. I see many homes with in that area going for 35-55k.
At those purchase prices in that area I can almost guaruntee you will be losing money every month, even without a property manager. Sounds like you are paying full price for them. In that area, maybe even over. Since there is little to no appreciation here, all you have is that monthly cash flow. Your estimated rents are probably closer to 700 than 1000.
Even if they are worth more than your offer price, they probably wouldn’t make good rentals–taxes would be too high. Do you understand about property taxes in MI? How they are uncapped at the sale of a property? It is not uncommon for taxes to triple or quadruple over what the previous owner was paying, especially if they have owned them for a number of years and were owner occupied.
You can do well with rentals in Detroit, but spend some time educating yourself before jumping in! Taxes, city inspections, vacancy rates, etc…