Flip #2 in a series of 3 blogs: 35% return in 36 days
5849 Baker Street, Mexicantown Detroit ~ Sometimes you win because you’re in the right place, at the right time, and you move faster than the competition.
That’s what happened for us at 5849 Baker St. in Southwest Detroit.
A straight-up arbitrage play, the listing brokerage priced this property wrong. We saw the error in the pricing, so we put it under contract within an hour that it was listed and then immediately put it back on the market and sold it.
Mispriced according to listing broker mistake, we saw the error and corrected the system, bringing the neighborhood back into its proper place of value. This is a cute house in an immigrant neighborhood, on the edge of hip, which is becoming attractive to hipsters.
We invested $60,000 initially, and sold the property for $81,000 in just over a month for a gross profit of $21,000. All of this took exactly 36 days.
35% return in 36 days, annualized to 1,996% ROI. Yes, you read that right, almost 2000% APY. Money loves speed.
We did nothing to add value to this property. It was a classic arbitrage play, exploiting a weakness in the market. We put it under contract, closed on it, then put it back on the market, and resold it. Profit!
We just added energy to the real estate market in Detroit, squeezing inefficiency from an imperfect market, bringing up values, bringing value to our partners.