US Detroit - turning the bend

To some "Detroit" brings in a somewhat negative no-go zone area.
To others, Detroit is a city of the Renaissance.
Especially after the 2013 bankruptcy filing which it has since successfully exited.
Love it or Hate it - I am here for the ROI now and the Capital growth it is just about to offer.
Knowing where to invest is the key.
Bad areas turn bad or even worse, Good areas are turning GREAT.
"Aspirational suburbs" as I would like to refer to.
Seen the rise over the last 3 years myself.

And criticise if you absolutely wish - some of us since the Somersoft forum have been there already being told we are about to lose our pants on the Atlanta investment journey back since 2011-12.
(And that even Americans won't even touch those properties with a ten feet pole... and these were from our 'some' of our Aussie investment experts)
Sorry pun intended - since looking back it is just hilarious.

And yes, we are smiling now!
Let's compare our notes again, in 2023 perhaps, on the performance of our portfolios.
Greetings from Detroit.

 

With markets like Atlanta booming I too have been looking at alternate markets and am happy to be one of your first clients in Detroit! I had been reluctant to go into this market previously but I do believe Detroit is experiencing a rebirth and with investors in the US chasing high yields they are moving to markets with lower entry prices. Looking to invest in some other cities as well but happy to be following in your footsteps in Detroit. Quite honestly I would not have attempted this market without you @GentleChief

You have an impressive portfolio and I value your expertise in this market.

 

Absolutely @Karina, Thank you.
For your post - Much appreciated.

Everything you have done, and doing for your investors in Atlanta (including me) is GOLD.
Wealthier and happy, and took your lead.

You have left a legacy here.

I am working this in Detroit, with my crew. Currently 11 members now and a truck in tow.
With a spirit of 'never say die' attitude.
It is a challenging market, but with great returns.
As always, Maria and I are just a phone call away, if you need anything.

We are a team. All of us.
Happy investing,

 

Ditto

Brilliant GC

I am enjoying the ride, the cashflow and the continuing upward trend

In total now 14 properties in USA
I plan to buy 16 more this year I am loading up and increasing income



MTR

 

Whoa, @MTR you are a powerhouse!!!
I have seen you being dissed on this forum, by some haters, but you know best, your portfolio talks for itself. Keep it going ma'am. We are in business.

 

How many do you guys have in Detroit?

I'm considering dipping my toes...

 

I (very humbly) have 43 Rental single family homes in Detroit.
76 rentals in total portfolio. Including Atlanta, QLD, NSW, VIC and 1 in WA.
Closing on 6 more properties in April - all here in the US (hopefully, all pans out well)...

Other US investors above, have similar numbers.
As you would agree @Shawn , at the end of the day what truly matters is how 'Free' you are from not selling your time for dollars. Not the number of properties.

 

May i. Ask. What an average of a single family home is worth in Detroit?
And rough income you genrate on a property?

 

Sure,
Average - 35-40k and approx 750 per month in rent.
Nett - 5000 p.a

 

This market reminds me of Atlanta in 2011, looks like investors now have a second crack at it

www.crainsdetroit.com/article/20171214/news/647696/metro-detroit-housing-sales-prices-continue-upward-trend

 

That's impresive. Can a normal Jone with a small amount of money such as $100k invest there? I could imagine some difficulties such as tax, accounting, PM, and most importantly finding the right stock while you are thousands miles away.

 

Gotta question the calibre of tenants though. If they can't afford to borrow $35K, theyd be the bottom of the barrel one would think.

$5K pa is not worth the constant heartache IMHO.

 

$5k / 40k is 12.5% return on the funds. No doubt there would be other settlement/ongoing/accounting costs.

But seems like reasonable return on the funds, especially if there is also possibility of CG

 

No 5K if your tenant's dodgy...and that quotient would have to be a higher than average probability if you buy a 35K house. I am speculating of course.

 

Hrmm same thing could be said for any property really.

Heard that same before about my Elizabeth SA property - I've had the same tenant paying for 5-6 years now.

Note I have NFI about the USA market and hold no property there, but am interested in how this is all going.

 

Thats exactly what I was told when investing in US in 2011

Success Comes down to who you source properties from quality vs rubbish, where you source, what you source, how they are managed and turnover of tenants ....and last thing volume

 

Is this net after taxes? And based on the exchange rate, the yield would usually be higher right? Since you have a fair few properties in the area, approx what proportion of the applications on average are suitable applicants that you would accept and are they usually lower social economic?

For example, in Corio, I would probably politely decline ~70% of applicants.

 

Sure Pentanol,

A quick guide -
a) These are before Tax figures
b) All figures are in USD (Purchase, Expenses & Income) so Yield will be the same and will not be more if you convert to AUD
c) Yes the applicants are lower socio-economic (3500-4000 per month household income - 2 working members and a young family so to say)
d) Yes, only 2 or 3 out of 10 applicants will truly qualify, with Rental history and background checks. And you select the best one to keep as you customer - too easy!

 

The reality of life unfortunately.
A tenant can afford to pay 800 per month (or 9600 per year)
Like a typical aged care worker. In a hospice.
Who typically earns 2500 a month.
Maybe a single mother of 2 in her mid 30s.
She cannot afford to put together enough deposit of say 15,000 to purchase the property.

And no - she is not a dodgy tenant.

 

Well, most of us started at this point (about 100k).