Home Buying in Warrendale>Question Details

Steve, Other/Just Looking in Michigan

Purchase a Detroit investment property for $75K...does this sound like a good deal?

Asked by Steve, Michigan Wed Jun 25, 2008

Hi,

I have the opportunity to purchase a 3 bdrm, 1 bath, 1250 sq ft single family house in Detroit as an investment. The asking price is $75K. The house is located at 8136 Indiana St. in Detroit, MI 48204.

Does anyone know the area well enough to say whether this sounds like a good deal? The home has recently been rehabbed and is in move-in condition. I've heard that the rents around that area for a home like this would be about $900 or so. Does that sound right?

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Hardmoneymi’s answer
Before you buy anything in Detroit please contact Metro Mortgage Investments, Michigan licensed direct private hard money lenders for the Detroit tri-county area (counties of Oakland, Wayne and Macomb). Check the website at www/metro-mi.com or call the office at (248) 547-3006.
Web Reference: http://www.metro-mi.com
0 votes Thank Flag Link Sat Oct 29, 2011
I'll be a little more to the point. $75k is way too high. Tom is right, if the property is completely rehabbed, rented, and cash-flowing properly, it should around $40k. It is also true that you can buy homes on and around that street for $10k-$13k. These properties will most likely need upwards of $20k in construction work to them. You will however still be ahead of a turn-key property.

I own a property management company in Detroit and manage single family investment homes for both domestic and international investor/landlords. Unfortunately there are many individuals in this market who are out to make a quite buck at the expense of a potential long term client. We have unknowingly become “work-out specialists” for investors who get in over their heads or buy the wrong properties, for the wrong price, in the wrong location, from the wrong people.

My companies, Precise Associates and Uptown Property Management, can help you source properties both in Detroit and the surrounding suburbs. We can help you find the appropriate property that will fit your investment goals. If it need rehab we can facilitate that and then we also will find you a tenant and manage the investment long-term (which is the most important part). We also have great “turn-key” properties that people can buy that are already rented and cash-flowing positively.

Contact me at info@preciseassociates.com.
My name is Gideon.
0 votes Thank Flag Link Mon Mar 22, 2010
Steve,

I think the price is a bit too high. I recently purchased a property from Mayfair Group who acquired the property from the bank, took care of all legal work, fully refurbished the property and placed a tenant through there U.S. partners and I only paid $55,495 and got a rental of $875 per month. The property was located in Rosedale Park.

Peter Jones
0 votes Thank Flag Link Sun Jan 24, 2010
I am an investor in the Warrendale area. I buy, sell rent and rehab homes. The area is very diverse in the style of homes as well as the people living there. Rent in the area can go from $700-$900 a month depending on the size and amenities of the home. I currently have a home that I just rehabbed and am looking to sell. I would be happy to share some pictures and a list of the updates if you are interested in a comparison to what you are looking to buy. Craig
0 votes Thank Flag Link Mon Jun 30, 2008
Not a good opportunity. The very best homes might go for $40,000. Right now on Indiana there are 6 pending sales and the highest asking price is $13,900. Also, there have been 17 sales so far this year on Indiana and 15 of them are under $15,000 and most are under $10,000. The rent estimate is high too. $500 a month is more realistic.

There are a lot of great deals in Detroit for sure. Make sure you have an honest representative guiding you.
0 votes Thank Flag Link Thu Jun 26, 2008
you are getting your leg lifted !!!
0 votes Thank Flag Link Wed Jun 25, 2008
Steve ... I did a little research. I'm not sure I would consider it a good deal. If you're not working with an agent, shoot me an email.

Best of luck,
Lisa Bender
0 votes Thank Flag Link Wed Jun 25, 2008
Hi Steve,
I am familiar with the area however I can't answer the question without knowing if your working with an agent as it would be unethical for me to interfere. Let me know if I can help.
0 votes Thank Flag Link Wed Jun 25, 2008
Steve,

The help of a good realtor will pay many dividends in this transaction. It sounds like you also need to do a good deal of market research about rents in the area. It is my experience that most people overestimate revenue and underestimate expenses when buying a rental property and get themselves in trouble. A good agent (who is experienced in investment proeprties, meaning that have or do own them) will be able to help you with a complete analysis of the property. I hope that helps.

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Wed Jun 25, 2008
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