Californian Property Baron sweeps up houses in Detroit
As we have said many times on this blog, Detroit is one of the hottest property areas for investors, and today we’ll bring you a story about one US investor who is making hay amongst the Detroit property market.
Michael Alexander is founder and co-owner of his property buying company in Detroit and together with his partner has already purchased 250 homes in Detroit and has a waiting list of buyers; the strategy is that when the Motor City rises again, and workers move back into the area, he can sell his properties for a tidy profit.
Finding the Properties
Alexander’s formula is pretty simple – he drives around nice neighbourhoods in Detroit and purchases any houses for sale in the street in the price range $20,000 – $30,000.
He then spends anywhere between $10,000 – $20,000 refurbishing the properties before either selling or renting the property.
Alexander avoids bad neighbourhoods in inner-city Detroit, as even though the house prices are very low, the houses will be impossible to rent out and hence offer no return.
Renting or Selling
Once the house has been refurbished, then it’s the turn of the property manager to earn his wages. His job is either to sell the property for anything between 20-30% profit, or alternatively to rent the property for a good return.
Of the 70 houses Alexander has refurbished since last winter, 64 have been successfully rented giving an extremely good return and success rate.
Alexander is executing exactly the strategy offered by UPI; we also source low-cost properties in good areas. Refurbish to a high-standard and then our property manger rents them out to give you a guaranteed 13% minimum return.