We have been investing in the Detroit housing market for the last two and a half years.
Our goal from the outset was to a) find the right market; and b) find the right properties, in the right neighbourhoods.
Very quickly, our investment properties were generating stable monthly income and growth through appreciation, and, about six months ago, we decided it was time to fast track to freedom.
We knew the only way for me to get to retirement quickly was to aggressively grow our portfolio.
While there are several different ways to fund investment properties, we decided to take $300,000 to purchase additional homes all in cash. By paying for the properties in full and with no mortgage to pay, we were able to maximize both the cash flow and our capital appreciation. With 100% equity and 100% of the rental income, we were able to achieve not only immediate income replacement but growth of our investment portfolio for the future.
On the one hand, $300,000 is a lot of money to invest all at once and for some, this would be a hard decision to make. For me, leaving a rewarding but stressful job and never having to go to the office again, made it a much easier decision. For me, as my father would say, “it’s what you call a no brainer”.
That being said, it was also important to me that:
By investing in real estate, I was buying a tangible asset;
By investing in cash flowing properties in the US, I was achieving diversification in my investment portfolio both in terms of asset base and in terms of currency;
By investing in real estate in Detroit specifically, I was buying in a recovering market which Forbes identified as the most undervalued housing markets in the US (FN1);
Forbes also identified Detroit as the second most in-demand rental market in the US for investors with an effective gross yield of 10.8% (FN2); and
By investing in real estate using cash and no mortgage, I carry less risk overall.
Statistically, the income needed to cover expenses for the average 2 person household in Canada is approximately $7,500 per month (FN3).
In today’s Detroit housing market, that means 5-6 duplexes generating approximately $1,400 each per month.
We bought our first 4 properties in Detroit through friends who had been investing in Detroit for over a year. At that time, we relied on people who had the knowledge to find the right properties in the right neighbourhoods for us. Now, we can do that for you.
If you would like to find out more, contact us at 1-866-964-6088 or send an email to voytek@usproperties.ca.
http://www.mlive.com/news/detroit/index.ssf/2017/07/forbes_lists_detroit_as_most_u.html
https://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil131a-eng.htm