Detroit is NOT the problem. It's YOU!
/Here’s an AI summary of the video "Detroit Investors: YOU ARE THE PROBLEM! 4 Ways to DO BETTER" by Monique Burns in 10 bullet points:
The Problem is Not Detroit: Monique highlights that many investors blame Detroit for their issues, but the real problem is poor decision-making and lack of diligence on the investor’s part.
Know the Numbers: Investors must understand the true costs and realistic rental income in Detroit. For a buy-and-hold, a fully renovated three-bedroom house should cost around $90,000, with rents typically around $1,200/month. $1,200 is at the low end, but it’s a safe number to use. Taxes are around $1,500-$,2000/year. Insurance is around $900/year. Property management is around 10-12% of rent collected/month.
Beware of Overpaying: Some investors overpay for houses with no potential for appreciation, leading to poor returns. They assume they will get higher rent in a more expensive neighborhood. This isn’t necessarily true in Detroit. They end up with more renovation costs, more tenants, more drama.
References Matter: Always check references when hiring property management companies or contractors. Look for both positive and negative feedback on past performance.
Proper Turnover Management: Efficient property management during tenant turnover is crucial. Investors should verify that the property manager handles turnovers on time and within budget.
Inspect Renovation Work: Before hiring a contractor, inspect previous work to ensure it meets the standards needed for Section 8 tenants. Talk to past clients about the contractor’s performance.
Preview Listings: Before listing a rental property, ensure it is presented well—good lighting, multiple photos, and cleanliness matter. Poor listings can lead to vacancies. Tenants look at photos and they do not read the descriptions. The photos must be sharp and bright.
Avoid Unrealistic Rent Expectations: Don’t expect excessive rent amounts. If a property manager promises higher rents, it might mean the Section 8 tenant has to contribute a large portion, leading to collection issues.
Tenant Screening: Always inspect how a potential Section 8 tenant is living at their current rental. Look for red flags like damage to property or overcrowding. This step is vital to avoid problematic tenants.
Property Condition for Section 8: For a successful Section 8 rental, ensure the house is in excellent condition—fresh paint, new carpet, and appliances can make your property stand out to potential tenants. If your property is nicer than your competition, it should take up to a month to find a tenant.
Current Properties for Sale
9150-9152 Asbury Park - Two family side-by-side
Detroit, MI 48228
1718 Square feet
Built 1952
Sale Price: $138,000
Rents: $950 x 2 = $1,900
12% PM Fees: $2,736
Insurance Estimate: $1,200
2025 Uncapped Taxes: $3,171
Income: $22,800
Total Expenses: $7,107
Cash Flow: $15,693
ROI: 11.4%
18902 & 18906 Morang - Two family side-by-side
Detroit, MI 48205
1900 Square Feet
Built 1952
Sale Price: $138,000
Rents: $950 x 2 = $1,900
12% PM Fees: $2,736
Insurance Estimate: $1,200
2025 Uncapped Taxes: $1,901
Income: $22,800
Total Expenses: $5,837
Cash Flow: $16,693
ROI: 12.2%