HOUSINGNEWS REPORT
DETROIT’S ROCKY HOUSING REBOUND
2017 VACANT PROPERTY RATES BY ZIP CODE YOY PCT CHANGE IN VACANT RATE
“The city itself outside of downtown has a long way to go. You get outside of downtown and it’s still a war zone.”
-3880%
3880%
DYLAN BORLAND PRESIDENT THE BORLAND GROUP
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pleased to see the transformation and revitalization taking place in the city’ s central core. “The city itself outside of downtown has a long way to go. You get outside of downtown and it’s still a war zone,” said Borland, who said his real estate investment firm has fixed and flipped more than 2,500 homes in Detroit since 2006. Low Prices Attracting Home Flippers Home flips accounted for 6.1 percent of all home sales in the metro area in the third quarter, according to ATTOM. That was a 12 percent increase from the same quarter of 2016. In all, 78.9 percent of the flipped properties were purchased with cash while the remaining 21.1 percent were financed. The median purchase price was $70,000 while the flipped price was $119,000 — an average gross flipping profit of $49,000 per flip
(70 percent gross return on original purchase price).
The bulk of Borland’s Livonia-based firm’s investing is in Wayne, Oakland and Macomb counties. At present he owns three multi-family properties that are 100 percent occupied. “The rents are significantly higher now. Our apartments rent for $1,100 to $1,200 a month and they rent out in a couple of days,” Borland said. Foreign (and Florida) Investors Flocking Foreign investors flocking to Detroit have transformed Albert Hakim’s real estate business. “We had to start doing property management because of all of the overseas investors,” said Hakim, who early in his career was an REO broker handling as many as 1,200 REO listings himself but has since founded City Management Group to manage 400
“Where else in the country can you get housing for a few hundred dollars. It’s still a completely desolate area,” Borland said. “That’s the reason investors are attracted to it. They all want quick returns and quick cash. When you can make your money back in a year to a year and a half what do you have to lose? Still, the risk is very high. You’re dealing with tenants who are not the best tenants.” Although Borland’s firm is focusing more on building a portfolio of multi- family and commercial properties these days, when he did focus on the single family product it was because at the height of the foreclosure crisis the city was selling about 1,800 properties a month. By contrast it is now down to about 100 foreclosures a week at the auction sale.
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JANUARY 2018 | ATTOM DATA SOLUTIONS
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