What Constitutes a “Great Deal” on Detroit Real Estate Investment Property
Every great deal has specific characteristics that make it a sound investment in the Detroit real estate market.
And no, it’s not price, price, price, price, price.
There are 5 main components that an investor must evaluate to know whether or not to buy a property:
Even if you got the property for a steal, if it’s the only house on the block, you’ve been robbed!
When considering a flip or rental, investors must know the density of the block. How many homes are intact? How many are vacant, fire-damaged or boarded up?
Understanding this makes a world of difference to a potential buyer or tenant.
Remember you can affect your property, but unless you buy up the whole block, there’s nothing much you can do about the surrounding properties. Choose wisely.
It goes without saying—investors all want a great deal. But a great deal in the long run is what we really want.
Don’t focus on price, but strive to understand from objective resources (i.e. those NOT involved in the sale) what the going prices are surrounding your prospective property.
- Exterior Condition
This is the easiest factor to evaluate. Aside from hidden defects, the curb appeal and exterior condition make it easy to quickly weed out potential headache properties.
Always remember to get pictures the same day or within a couple of days old. No using Google Earth!
- Interior Condition
This is the hardest factor to evaluate, especially if you’re purchasing occupied property. Don’t worry, have your real estate contact build in enough time to properly understand the interior condition of a property and what potential issues could come up with normal wear and tear.
And as always, NEVER skip inspecting before you buy. This is not a negotiable point!
If you can’t see it, don’t buy it.
- Title Disposition
Ahh, the tricky part. Title in Metro Detroit is another way of denoting ownership. So, unless there’s a very special, once in a lifetime opportunity, we always want title free and clear.
ALWAYS use a title company or title attorney to properly assess the history of the title, transfers and any liens or encumbrances that could cloud your ownership of the property.
It is very easy to acquire properties with sketchy title, but it’s nearly impossible to get rid of them, so beware.
If you view any potential investments through the lens of these 5 factors, it’s makes the decision-making process much clearer and easier.
Good luck and happy investing!