101622 . 31 Home SFR Detroit, MI

Highlights:

• Portfolio size reduced - Homes sold and active sales pending
• Section 8 Portfolio with over $500,000 in CapEx Invested
• 31 scattered single-family homes in Detroit, MI comprising 29 single-family detached homes and a duplex (2 doors)
• Four 2-bedroom and twenty-seven 3-bedroom homes
• Home ages range from 1929 to 1970, with a 1949 average year of construction
• Sizes vary from 692 to 1,098 square feet, averaging 898 square feet per home
• Homes are close to each other as the portfolio spans just two zip codes
• $80,233 per home is significantly below Detroit’s current median home price of $148,000
• Year 1 Stabilized Cap Rate of 10.42%
• Only 3 vacant homes
• Current rent of $1,071 per month is 3% below the market rents of $1,107
• Seller has additional homes available for sale in Metro Detroit
• Seller deploys D.A.W.G. system to deter vandalism and theft during tenant turns
• All SVN® Offices Are Independently Owned & Operated
• Local Broker License Information: www.SFRhub.com/realestatelicensing

Description:

Contact:
TOM JOHNSTON
Managing Director | Designated Broker
SVN | SFRhub Marketplace
T: 602.441.5354
C: 602.403.3695
tom.johnston@svn.com
License #: BR507919000


BOR:
SVN | Stewart Commercial Group, LLC
Dan Stewart
Designated Broker

Visit www.SFRhub.com and search for portfolio 101622 for more information.

SVN | SFRhub Marketplace is excited to introduce this portfolio of 31 scattered single-family homes in Detroit, Michigan. This portfolio was originally 36 homes and has shrunk due to sales to investors. As of this offering memorandum production, there are four homes in escrow. The portfolio resides in Wayne County with all but five of the homes in the City of Detroit. The other five homes are in Redford. Comprising twenty-nine (29) single-family detached homes and a duplex (2 doors), the portfolio consists of four 2-bedroom and twenty-seven 3-bedroom homes. The portfolio has three vacant homes. The vintage of these homes ranges from 1929 to 1970, with an average year of construction in 1949. Sizes vary from 692 to 1,098 square feet, averaging 898 square feet. The current average rent of $1,071 per month is 3% below the market rate of $1,107, presenting an opportunity for an investor to increase rents and boost returns upon lease renewals. Market rents for this portfolio are over $100 below the current median rent in Detroit of $1,220 according to John Burns Research & Consulting.

Priced at an average of $80,233 per home, this portfolio is significantly below Detroit’s current median home price of $185,000 per John Burns. The Burns Home Value Index shows Detroit home values increased by 7.4% in 2023 and are expected to grow by almost 10% through 2027.

The majority of the homes are Section 8 and the seller has all the appropriate documentation as required by the housing authority. All of the homes are registered with the city as certified rental properties. Spanning just two zip codes, these homes are in close proximity to each other.

The seller began acquiring homes over a decade ago, implementing substantial improvements as properties were added to the portfolio. Since 2018, this SFR operator has invested over $500,000 in capital improvements, encompassing new roofs, new windows, new HVAC systems, foundation repairs, new sewer lines, exterior paint, bath and kitchen remodels, new flooring and appliances, and water heaters. The seller has documented the improvements made to each home in this portfolio.

An investor can achieve a net cap rate of over 10% at stabilization by leasing the ten vacant homes, raising rents to market on renewals and tightening expenses. The professional third-party property management company engaged to oversee the portfolio is interested in being retained after a sale and would be a great asset in assisting an investor through stabilization. To ensure the homes’ security during tenant turns, this operator deploys the D.A.W.G. system to discourage would-be vandals as evidenced by the photos in this offering.


Detroit, located in southeastern Michigan, is the largest city in the state and has a rich history as a major center of American industry and innovation. The city is known for its contributions to the automotive industry and has a legacy of manufacturing and industry that continues to drive the local economy.

The city’s economy has undergone significant changes in recent years, with the decline of the auto industry leading to high levels of unemployment and poverty. However, there have been efforts to revitalize the city, including the development of new industries such as technology, healthcare, and finance. There has also been a focus on attracting new businesses and entrepreneurs to the city, with the creation of innovation hubs and coworking spaces.

In terms of city development, Detroit has seen a significant resurgence in recent years, with new construction and renovation projects revitalizing neighborhoods and boosting the local economy. Major development initiatives include the construction of new residential, commercial, and retail spaces, as well as the redevelopment of historic buildings and sites.

Education is a top priority in Detroit, with a range of public, private, and charter schools available to students. There are also several colleges and universities in the city, including Wayne State University, Marygrove College, and the College for Creative Studies. These institutions offer a range of programs and services designed to support students and provide them with the skills and knowledge they need to succeed in the workforce.

In terms of tourism, Detroit is a popular destination for both domestic and international travelers, offering a range of attractions, cultural events, and outdoor activities. Visitors can explore the city’s rich history at museums such as the Detroit Institute of Arts, or enjoy a game or concert at one of the city’s many sporting and entertainment venues. The city is also home to several parks and green spaces, including Belle Isle Park and the Detroit RiverWalk, offering opportunities for recreation and relaxation.

In conclusion, Detroit is a city that is undergoing a resurgence, with a focus on revitalization and development to drive economic growth and improve the quality of life for residents. With a rich history and a vibrant arts and culture scene, the city is poised to continue to attract new residents and visitors in the coming years.