We purchased the Crown Jewel in November 2019 for $38,000.
At the time of purchase, I knew this would be the nicest rental in our portfolio due to its size (a bit more than 1,700 sq ft) and prime location in Detroit’s Morningside neighborhood.
I also knew we were going to do a pretty extensive rehab on it. But I’ll get more into those details later in the article.
Note: This is the seventh rental property performance update. You can view the entire page of updates here.
For now, here’s how the Crown Jewel has performed over time:
As you can see, this rental hasn’t performed all that well for us from a cash flow perspective.
And while we initially did very well with the BRRRR portion, we’ve had a bit of a rocky time since then.
In the rest of this article I’m going to give you the full background and what’s been going wrong these last few years.
The Crown Jewel History
The Crown Jewel was one of my first off-market deals behind the Dougie Fresh Duplex.
An agent friend of mine called, knowing I was partial to the Morningside neighborhood, and told me I should take a look.
When I entered the house, there was a pretty dense smell and this was the scene that greeted me:
I was in love!
And I made an immediate offer even knowing I didn’t have the money to start the rehab. In fact, it wasn’t until some 8 months later that we were able to start work in July 2020.
A True BRRRR Renovation Attempt
This area supported a more involved rehab, and we were excited to do this gorgeous home justice.
We focused particularly on opening up the kitchen to the main living area—our first time attempting a project of this scope.
This marked the beginning of our shift into larger-scale renovations, a direction that I still question today in terms of aligning with our overall investment goals.
Beyond opening the kitchen, we also painted the interior and exterior of the home, redid the roof (initially unplanned), refinished the original hardwood flooring, fully redid the kitchen, and added a half bath on the main level.
Here are some before/after photos of the house:
The fencing was reinforcing the crumbling brick porch. 
Curb appeal upgrade! 
Second level stairs after entering. New entryway and stairs. 
Living room off the right of the entryway. Pain, refinished floors, etc. Dining area off the living room. The kitchen is to the right. Same photo taken from the other end of the room. Kitchen now to the left. 
Opening up the old kitchen. 
New kitchen 😍 The basement was pretty gross! But it’s now fresh and clean.
Post-Rehab Results & Numbers
After the rehab, we had almost exactly $112,000 invested in the home. This is, by far, the most amount we had sitting in a home at once.
Given we’d paid $38,000 for the house, that means we spent $74,000 on the Crown Jewel’s rehab.
Oof!
Needless to say we were nervous for the appraisal.
But it did not disappoint.
The Crown Jewel ended up appraising for $178,000 in January 2021 which means we were able to pull out $126,000 after closing costs and prepaid taxes and insurance.
Yes, folks, we had officially done our first full BRRRR project 🙌🏼
I want to stress that because this was our 7th rental property.
It took us 6 other tries to finally execute a complete BRRRR that so many people fixate on and think is easy to do.
Let me tell you, despite all the hype and online gurus, pulling off a full BRRRR is no easy task.
We were over the moon with the result, but renting the home was the next challenge!
The Crown Jewel Has Had A Tough Tenant History
The Crown Jewel has seen its fair share of tenant changes over the years. We’ve had three different tenants so far, each with their own unique circumstances.
Our first tenant moved from out of state and stayed for 18 months at $1,700/month.
It was a pretty smooth tenancy, but they ended up moving to a different part of Detroit once they had their bearings.
The second tenant moved in during June 2022.
We didn’t actually place this tenant ourselves.
We were in the thick of making our cross-country move from Michigan back to California. As a result, we decided to test out a property manager.
By June 2023 we decided to fire our property manager and transition the couple of homes back to self-management. The tenant the PM had placed did not cooperate during this process.
She refused to communicate with us, didn’t pay last month’s rent, moved out and sent the keys to our lawyer’s office.
Interestingly, this was another tenant that had moved from out-of-state.
She worked remotely for the University of San Francisco and I believe she was planning to move at the end of her lease.
When she found out there was a management transition taking place, I speculate that she decided to take advantage of the situation.
As a result, we ended up having to do our first turnover from California.
The turnover went smoothly—until it didn’t.
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Break-In And Theft
Just before our newest (and current) tenant moved in, we experienced a break-in and theft.
The A/C unit, furnace, water heater, and refrigerator were all stolen.
We had to scramble to replace everything, spending about $8,000 to ensure the home was ready for the new tenants. Despite the setback, the current tenants moved in successfully, and we’re hoping for longer-term stability.
They recently signed a lease renewal and are on their second year with us. The last time I was in Detroit I stopped to visit and check on the house. They absolutely love the home, and it sounds like they have no plans to leave any time soon.
Here’s hoping 🤞🏼
It’s these challenges with the Crown Jewel that inspired the post Nicer Homes Make Poor Rentals.
Perhaps this has all been a string of bad luck and the home will eventually start producing nicely for us. Or, perhaps the lesson here is folks that move from out-of-state are at higher risk of shorter-term tenancies.
But for now, the Crown Jewel has been mostly an appreciation play.
The Crown Jewel Today
The Crown Jewel continues to hold its unique position in our portfolio.
While it hasn’t been the most consistent cash flow performer, it’s certainly been an interesting journey with many lessons learned.
Current Issues
The upstairs bathroom is one of the few things we didn’t touch much during the renovation because it was all original from the 1920s and had a really cool, vintage look.
And, to be honest, we really didn’t have the budget to do it at the time anyway.
However, we’re now paying for that decision.
The shower pan has been leaking, and we’re currently in the process of breaking up the pan and retiling it.
The leak has also damaged the ceiling drywall in the living room below. The repairs are costing us about $3,000, but once completed, it should be good to go for years to come.
Rent and Tenant Situation
The property is still rented for $1,700 per month, which is notable because, unlike our other properties, we haven’t felt comfortable increasing rents here.
That said, I think we can aim for a modest rent increase during the next lease renewal.
Fortunately, our current tenants recently renewed their lease, marking the first time we’ve had a renewal since buying the property.
They love the home and don’t have immediate plans to move, which brings some much-needed stability.
It should be noted that these tenants are a young couple with two kids. They were living downtown Detroit in an apartment building and wanted more space.
Again, as I’m writing this I’m realizing the turbulence with this home’s performance very well may lie in the fact that the two previous tenants were not local.
Appreciation and Future Outlook
Today, the Crown Jewel is likely worth between $225,000 and $250,000, reflecting solid appreciation since its appraised value of $178,000 in January 2021.
With so much revitalization happening in the Morningside area, I’m happy to continue holding this property as long as we at least break even.
I believe that, in time, the Crown Jewel will start performing well from a cash flow perspective, especially as rents in the area catch up to the improvements we’ve made.
Here’s hoping!