the investors guide to detroit real estate

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  • 5/24/2018 The Investors Guide to Detroit Real Estate


    Tel: +66 (0) 86 266 7032


  • 5/24/2018 The Investors Guide to Detroit Real Estate


    It's no secret that Detroit was hit hard by the recession.

    Massive job losses meant people could not pay their mortgages and

    foreclosures were at a record high.

    As a result house prices have fallen to their lowest since 1993.

    Today, even when people can afford a mortgage, banks are too scared

    to lend.

    So these people are forced to rent.

    This means there is a huge demand for high quality rental homes in

    good areas.

    Now is the me to take advantage...

    Detroit is starng to recover.

    Unemployment rates are falling.

    House prices are rising.

    But prices are sll at their lowest since 1993.

    And because they are so low, you can achieve rental yields of 16% and

    oen more.

    Big business is now invesng millions of dollars in Detroit.

    Once banks start to lend again - prices will rise quickly and this

    opportunity will be gone.

    Investment opportunity

    Page 1 of 23

  • 5/24/2018 The Investors Guide to Detroit Real Estate


    What is on offer?

    Today you can buy 3-bedroom homes in middle-class areas of Detroit fora fracon of what they sold for just a few years ago.

    These are completely refurbished, tenanted properes. With rental

    yields in excess of 16% ne.

    This is an easy to manage, hassle free investment.

    As an experienced management company looks aer everything for you.

    Key Points:

    Homes from US$ 31,000

    Already tenanted

    Yields of 16% plus

    Prices at their lowest since 1993

    High capital gains

    Newly refurbished

    High quality, 3-bedroom, brick built homes meeng government


    Turn-key, hassle free investment

    Experienced management team take care of everything for you

    Investment opportunity

    Page 2 of 23

  • 5/24/2018 The Investors Guide to Detroit Real Estate


    Investment opportunity (cont.)

    Page 3 of 23

    High Rental Yields

    The high number of foreclosures and lack of mortgage financing has

    resulted in a large demand for rental properes.

    The average rent for a 3 bedroom home in a middle-class area of Detroit

    is US$ 900 a month.

    With house prices as low as US$ 31,000 - yields are around 16%, oen


    That is net - aer management fees, property taxes and insurance.

    All properes have tenants in place.

    You earn an income from day one.

    Strong Capital Growth

    House prices are already rising.

    According to the Naonal Associaon of Realtors, in the last 12 months

    the average price of property in Metro Detroit has risen by 7.7% to US$


    This is sll far below the 2005 average of US$ 172,000 - so it leaves you

    plenty of room for capital growth.

    In November 2011 mulple lisng service Realcomp II Ltd. reported

    property sales in Metro Detroit rose for the fourth month in a row:

    "Aer four months of consecuve gains in the local housing market, we

    can probably say it's the start of a recovery," said Realcomp CEO Karen


    In September, sales increased by 8.2% over 2010.

    And in October 4,176 homes were sold compared to 3,983 in 2010. A

    rise of 4.8%.

    As the economy improves and banks start to lend again, demand will

    increase considerably.

    This means you will benefit from high capital appreciaon and have a

    large target market to sell your property to when you are ready.

  • 5/24/2018 The Investors Guide to Detroit Real Estate


    Easy to manage, hassle free investment

    These properes have been completely refurbished oen with new

    roofs, re-wiring and plumbing.

    They are cerfied to meet current Government health and safety


    This means you dont need to worry about any costly repairs or

    maintenance bills in the next few years.

    How can you be sure your investment is being looked aer?

    A top Detroit management company with many years of experience

    looks aer everything for you.

    They will find you new tenants if you need them.

    Theyll make sure your house is well maintained.

    They will even collect your rent and pay your money into your bank


    On top of that, you get access to a 24 hour help line - so you can call


    You also get your own website login where you can access your monthly

    account statements, signed contracts with tenants, your property tax

    receipts, maintenance quotaons and bills, a copy of your management

    agreement and inspecon reports for your property.

    Your rent is paid directly into your nominated bank account. This can be

    in the US or anywhere in the world.

    Locaon, Locaon, Locaon...

    As with any city there are good and bad areas.

    The properes we offer are all in middle-class suburbs of Detroit.

    They are close to major highways, good schools and amenies in

    desirable areas where respectable families want to live.

    We can provide the address for every property we offer so you can see

    the locaon for yourself, thanks to Google Street View.

    Investment opportunity (cont.)

    Page 4 of 23

  • 5/24/2018 The Investors Guide to Detroit Real Estate


    This 3 bedroom, 1 bathroom property is typical of the type of house you

    can buy.

    It has recently been refurbished, including a new roof, new plumbing,

    re-wiring, interior painng and re-finishing.

    What type of property can you buy?

    Ohio Street, Bagley, North West Detroit - Price US$ 49,500

    Previous sale price US$ 87,955

    Page 5 of 23

    The Locaon

    The house is in Bagley - a middle-class area of Detroit.

    It has access to major roads including McNichols Road and

    Lodge Freeway.

    And its within walking distance of Mumford High School and

    Marygrove College.

    The Detroit Public Library is a short drive away.

    Previous Price

    The house was last sold on 2nd January 2007 for US$ 87,955

    (Source: Detroit Department of Public Records).

    Today you can buy it for just US$ 49,500 - saving you US$


    Rental Yield

    The house has tenants paying US$ 950 per month. The rental

    yield is 16,1% net - aer all management fees and taxes.

  • 5/24/2018 The Investors Guide to Detroit Real Estate


    The Boom Line...

    Your Rental Yield

    Page 6 of 23

    Ohio Street, Detroit Purchase Price US$ 49,500

    Annual Rental Income US$ 11,400

    Management Fee US$ 1,140

    Net Annual Income US$ 7,960

    Net Return 16.1%

    Annual Property Tax and Insurance US$ 2,300

    Average rental yields are 16% and above.

    That is net - aer management fees, property tax and insurance.

    All properes are sold with tenants in place.

    How is your income paid?

    Your rental income is paid into your nominated bank account every month.

    This can be a bank account anywhere in the world.

    We would recommend a US Dollar account to avoid currency fluctuaons.

    But the choice is yours.

    Experienced Management

    Your property will be looked aer by an experienced Detroit management


    They will:

    Collect and manage rental payments

    Pay your rent into your chosen bank account Adverse for and screen new tenants

    Provide maintenance and call out services

    Supply online property management accounts, so you can track your

    investment at all mes

    Carry out regular property inspecons and produce reports based on


  • 5/24/2018 The Investors Guide to Detroit Real Estate


    The Boom Line (cont.)


    Ownership is freehold.

    Payment Terms

    A reservaon fee of US$ 5,000 secures your property.

    The balance is payable on transfer of tle deeds - usually within 21 days.


    Finance is not currently available.

    Page 6 of 20Page 3 of 20Page 7 of 23

  • 5/24/2018 The Investors Guide to Detroit Real Estate


    Its a sellers market.

    Well not quite - but it wont be long before it gets that way.

    According to data from Real Estate One - Michigans largest real estate

    company - at the end of June 2011 there was a 5 month supply of homes

    in the Detroit Metropolitan area.

    That compares with an 18.9 month supply at the end of 2007 when the

    area was awash with foreclosures.

    To give you an idea - in good mes the US housing market usually has

    between 3 and 6 months supply.

    More than 6 months supply and it is a buyers market.

    Less than 3 months is considered a sellers market.

    So you could say Detroit is close becoming a sellers market.

    Houses are being snapped up faster than the naonal average and

    property is typically on the market only 67 days before it is sold.

    When the US banks start lending again house prices will rise fast.

    That is when you should be looking to sell.

    And remember, you will get a 16% rental yield on average - oen more.

    So you stand to get ALL your money back in rental returns in just over 6


    And you will sll own the property.

    How do we have access to these properes?

    We work with a major Detroit company who has been invesng in

    foreclosures fo