Are The ARV’s On Detroit Properties Worth The Investment? – Leonard Pickett
On this episode of The Closing Table, we sat down with Leonard Pickett!
To watch the full episode, check it out on YouTube below. In the meantime, here’s a summary of the conversation…
Here’s what you missed from Leonard Pickett…
The conversation began with Leonard, a seasoned real estate professional with two decades of experience, revealing an intriguing persona beyond the world of real estate. In addition to being a husband and a proud father of two, he also holds the distinction of being a licensed minister, firmly rooted in his faith and service to the Lord. Leonard attributes much of his success in the real estate industry to his unwavering faith. His journey began when he made the bold decision to leave his engineering role at General Motors and venture into real estate, eventually establishing his own brokerage, RCH Brokerage, which has thrived ever since.
In the early stages of his real estate career, Leonard’s niche primarily revolved around bank-owned properties. However, the landscape of real estate is ever-evolving, and he adapted to the changing tides, especially in the wake of the significant housing crash in 2007. The aftermath saw a shift towards auction-type property deals, and while Leonard still maintains relationships with some banks, his business transformed to encompass various aspects.
Leonard’s professional endeavors extend to being a realtor for the Detroit Land Bank, as well as leading a wholesaling team with a dedicated call center that actively engages with the community to tackle real estate-related issues.
Throughout his journey, Leonard has accumulated numerous noteworthy accomplishments. His ability to pivot and adapt within the real estate industry, particularly during challenging times, has set him apart. His work with the Detroit Land Bank and the establishment of a wholesaling team underscore his commitment to making a positive impact on his community.
Leonard’s real estate expertise is primarily focused on the Detroit market, a city renowned for its rich history, diverse culture, and iconic landmarks. Detroit’s history is characterized by a significant period of growth in the 1960s, and it is celebrated for its culinary delights, distinctive architecture, and more. However, the city faced a substantial setback during the 2007 recession, which led to a plummet in property values. Despite this setback, Detroit has made a remarkable resurgence, with property values experiencing an upswing. In certain neighborhoods, homes are now selling for over a million dollars. The median value for starter homes in Detroit stands at approximately $110,000, with average property values hovering around $175,000. Leonard acknowledges the market’s transformation and remains grateful for having navigated through its fluctuations, both in good times and bad.
On some of his property listings, Leonard not only presents the asking price but also highlights the After Repair Value (ARV). This strategic approach is intended to convey the advantages of considering the ARV when evaluating potential investments. He explains that many of the properties they come across are either wholesale deals or ones he might not personally pursue due to an overload of opportunities. To address this, he appends a nominal fee and provides potential buyers with both the as-is price and the ARV, once the property undergoes necessary repairs.
For instance, if the purchase price is $100,000, repairs are estimated at $35,000, and the ARV is projected to be $200,000, Leonard might propose selling it for $110,000. With a repair cost of $35,000, they would potentially be looking at a profit of $55,000 upon selling it at the ARV. If the numbers align and it makes financial sense for the buyers, they move forward with the deal and stand to make a profit. Leonard also encourages clients to involve a contractor to ensure the numbers align and the investment is feasible. While he occasionally refers clients to contractors for repairs, he primarily focuses on educating them about what to look for in a contractor.
Reflecting on properties with captivating histories or unique backgrounds, Leonard shares an example of his parents’ residence, which was originally owned by magazine tycoons in the early 1900s, making them its second owners. This historical connection adds a distinctive appeal to the property and enables Leonard to share stories that resonate with potential buyers. While Leonard may not have directly sold a home with such a history, he has successfully leveraged the allure of nearby historical properties, such as one in close proximity to Henry Ford’s original residence. These stories are skillfully woven into the property listings, enhancing the overall experience for potential buyers and generating a deeper interest in these unique properties.
In the dynamic metro Detroit market, Leonard is well-acquainted with the prevailing misconceptions that often cloud the perceptions of out-of-town or out-of-state clients. As a longstanding figure in the local real estate community, he’s uniquely positioned to offer insight beyond these stereotypes. When it comes to convincing potential investors that Detroit is a promising market, Leonard’s approach is to debunk the notion that all properties are available for a mere $5,000 to $10,000. He redirects clients towards a more realistic perspective, urging them to think bigger, consider the larger picture, and assess value. He emphasizes the importance of purchasing properties that can be financed once renovated, with a contingency plan in case selling proves challenging – ensuring that clients can recoup their investment and continue building their real estate portfolio. Leonard has successfully educated and redirected clients from across the country, enlightening them about the significance of ARVs and available programs.
In his extensive career, Leonard has encountered numerous complex legal and zoning challenges while navigating property transactions. For instance, he is currently handling a case where a property’s chain of title is complicated due to a break in ownership caused by a missing death certificate, a common issue that he expertly resolves. In another ongoing transaction, he’s dealing with a property in probate with zoning intricacies stemming from the combination of two lots into one during the home’s construction. His proactive approach involves addressing these issues, such as writing affidavits, to correct the chain of title efficiently.
The conversation wraps up with Leonard sharing his personal and professional inspiration, he draws significant motivation from the movie “Hustle and Flow.” This film resonates with him because it vividly portrays the raw emotions associated with striving for success, yearning to change one’s lifestyle, and achieving the American dream. The collaborative spirit in the movie, where people come together to help the main character, serves as a reminder that persistence and ambition can overcome obstacles. This story reinforces Leonard’s belief in the power of unwavering faith, perseverance, and the possibility of achieving anything through prayer and dedication.
Check out Leonard Pickett:
Facebook: https://www.facebook.com/leonard.pickett.37
Facebook Business Page: https://www.facebook.com/LennieBuysDetroit/?show_switched_toast=0&show_invite_to_follow=0&show_switc…
Instagram: https://www.instagram.com/lennie_buys_detroit/
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