“Al Beahn was a 22-year-old college grad living in his parent’s basement in the Detroit suburbs when he bought his first investment property in 2009. It cost him $27,000 and he flipped it three months later for a $16,000 profit. Today, his company, Pioneer Homes, has bought and sold 1,000 homes, primarily through a business model he calls the turnkey rental.
“Beahn buys and renovates a single-family home, hires a property manager and finds a tenant—then sells the whole package to an investor. He works mostly in the historic neighborhoods west of Detroit’s downtown, where the promise of high yields has helped attract investors from more than 30 countries. ‘There’s not many markets in the world where you can buy a house for $50,000 and get a 1,500-square-foot brick Colonial that will rent at $850 a month,’ he said.
“The combination of low prices and optimism about the local economy has made the Motor City popular with property investors at a time when the for-sale market barely functions for buyers who want to live in their houses. Eighty-eight percent of the homes sold in Detroit last year were purchased by investors, according to Attom Data Solutions, up from 35 percent in 2010.”