Snapshot Summary of My First Detroit Deal

Lol I started typing on my crappy mobile keyboard and just kept going, in the end.

 

Hi C-Mac,
Just curious if you have undertaken the acquisitions yourself or have you used someone in Australia to manage the process for you?
Many thanks in advance.

 

I've used a Facilitator / Buyers Agent so far, for every purchase made in all states in the US.

Most cities are very 'street by street' versus in Aus where (typically) properties are 'suburb by suburb' (which makes it a little easier to research entire suburbs oh and a LOT easier to actually visit). But both Facilitators / Bad I've used are mostly AU-based and have been in their markets for a long time. So I trust them in getting the prospective properties at the right price for the right street for the right yield potential. Particularly in the south.

This doesn't mean I don't do my own research where possible. Bigger Pockets (USA's version of Property Chat - but on steroids as it also includes webinars by both hosts, posters, and sponsors; as well as a huge volume of meet-ups - now Zoom's as well as online courses and so on).

Atlanta is a sprawling city of 6 million with lots of counties and markets within markets so I found that a bit too overwhelming so just entrusted my Facilitator there. Detroit is a bit easier to get an understanding of. It also sprawls but is being consolidated via the city-blight program and good/bad streets are a bit easier and obvious to understand.

The only city where I feel like I've learned the good and bad streets just a little bit more (along with the A B C D grade suburbs) is Montgomery. That's because it is a small city of 250,000 and rather compact too. The other opportunity with Montgomery at present lies in the wake of Hurricane Sandy which has jusg started to finally disolve. It was a 1 in 100 year hurricane event for central Alabama. Mobile Alabama right on its small coastline is normally the only place that really gets walloped by hurricanes. The central area of the state normally never does.

But Montgomery invested over a decade ago (not long after Katrina) in a levy upgrade and river distribution changes; and along with a pretty well executed city hurricane plan and evacuation procedure; they have held up well. Very minimal flooding and minimal actual houses affected. This gives me more confidence in it from a flood/hurricane perspective.

Sidenote: my only Montgomery deal has so far worked out to be my best deal of the lot so far; overall in terms of net-yield, low maintenance, tenant quality/consistency; capital growth.

 

Atlanta has been the stellar performer for me, on average 400% growth since buying in 2011/12 and minimum of 15-20% net returns/yields

 

That is so awesome! Sad to say it but I think Atlanta has risen so much that even though there might still be some good rare deals to find; I think these days the buy-in prices are a lot higher and the net-yields (being net of running expenses but prior income tax) probably more in the 8% - 15% net yield range. Its a product of its own success, I guess!

There WERE markets that were producing jet 15-20% that WEREN'T hellholes, just two years ago (two that come to mind were parts of Indianapolis and parts of Nashville); but even those markets have lifted a fair bit.

Aussie Cherie Barber had a HGTV show called 5 day flip where she flipped houses in parts of Minneapolis--Saint Paul. As part of that I was watching an interview and she said that post-rehabbed houses in parts there could net 15% yields. Again, that was a couple years ago.

 

Great information in the thread!

I have collected my notes and started researching in zillow to narrow down the state.

 

Hi folks, just did a new deal snapshot post for my latest one which is in Alabama and is pretty cool because it was my first "3 into 4 bedroom" project in the US. You can read it here:

3-into-4 bedroom conversion success in Montgomery, Alabama