E61: Knowing the Basics of Real Estate Investing in Detroit with Tyraa Nicole
Real Estate Hackers
English - August 17, 2022 11:00 - 27 minutes - 25.5 MB - ★★★★★ - 54 ratingsBusiness realestate investing flipping financialfreedom firemovement invest property rental realestateinvesting rentalproperty Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
Location isn't the only factor making or breaking your property investment. Investors often overlook two critical questions: Who are they dealing with, and who's renting the property?
In this episode of Real Estate Hackers, we look into the real estate situation in Detroit for investors. With a good block, appreciation, and a good team, you can make a lot of money in Detroit — more than you might expect!
Here are some power takeaways from today’s conversation:
Make a property purchase deal with someone who knows the area.
Be extra mindful in choosing tenants.
Finding a decent block is key to acquiring a good property in Detroit.
More Detroit investors are doing financing.
Episode Highlights:
[04:54] Investing in Detroit Today
The real estate market in Detroit has drastically increased. Acquiring a move-in-ready B-class property would now cost a little under $100,000. Meanwhile, the rental rates have increased to a minimum of $1,200.
There has been a tremendous amount of growth in Detroit in the last ten years. It's now more than just downtown and it’s continuing to develop.
[10:33] The Impact of COVID on Detroit
The COVID situation in Detroit was an investor’s nightmare. The court system in the city is tenant-friendly, so owners had almost no say about tenants not paying rent at that time. It was even more difficult to get possession of their property back.
On average, it has taken about 4 to 6 months to get a tenant out even without asking for rent payment. Pre-COVID, it only took 60 to 90 days at most to evict tenants.
[16:17] Basics of Leasing in Detroit
Pre-COVID, Detroit property owners used to require 550 credit scores. It increased to 600 and up post-COVID. The background checks have also become more extensive. However, a dilemma surfaced in the newly-enforced law excluding evictions occurring during the pandemic in records.
Be hands-on when selecting tenants. Do interviews, and have a detailed conversation with their previous landlords.
[18:55] Investment Purchases in Detroit
The average house in Detroit now is over $100,000. As long as you can find a decent block, you can acquire a good property. Most investors these days do financing more than cash purchases.
Notable quotes from the Episode:
[10:20] “In terms of the impact of COVID. I know it got a little bit tricky there, evicting tenants through COVID. Some places were greatly impacted. Some weren't impacted too bad. I feel like Detroit was impacted pretty tough, where it was really hard to get tenants out. It feels like that's kind of nearing the end.”
[19:18] “So doubling the average house price in four to five years, that's pretty insane appreciation.”
[23:29] “9-, 10-type cap rates aren't impossible. If you find a good team, and clearly there's some appreciation here, there's people making actually a lot of money in Detroit, which may surprise people.”
Resources Mentioned:
www.facebook.com/tyraanicoleproperties
www.instagram.com/iamtyraanicole/