Anatomy of A Great Detroit Real Estate Investment Deal

Anatomy of A Great Detroit Real Estate Investment Deal

Sometimes Detroit real estate investors just need to see the numbers to know that the types of investment properties they’re seeking are really out there.

Here’s an excellent example of an affordable, large rental property that needed just a bit of work to make it ready to produce cash flow:

Detroit real estate investments

Property Type: Single Family Home
Style: Bungalow
Beds: 4
Sq. Ft: 1460
Baths: 2.5
Taxes: $1400/year
Price: $48,000
Rehab: $8500

This gem is a great example of a huge rental property that needed a small amount of rehab to make it ready for renters.

Additionally, because it was located in an up-and-coming neighborhood, the value of the property over time will increase.

Here’s how to evaluate potential cash flow (*NOTE: this is for investors paying cash)

Purchase Price: $48,000
Rehab $8,500
All in Cost $56,500
Income
Monthly rental payment Unit 1: $900 $10,800
Total Gross Rent $10,800
Effective Rent
Effective Income $10,800
Expenses
Taxes $1,400
Insurance $800
Property Management $1,080
City of Detroit rental inspection fee $150
Total Expenses $3,280
Net Operating Income
NOI $7,520
Annual return (If paid all cash) 13%

 

So, even with expenses and city inspections, the return can be 13% or higher with higher rent.

Additionally, as the market increases, the property value will likely double within the next 1 to 3 years.

This is a win-win all around.

Call us or click the box below to get great deals like this for your investment portfolio.

Good luck and happy investing!

 

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