Metro Detroit - Choosing Area for 1st Property to BRRRR

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Metro Detroit - Choosing Area for 1st Property to BRRRR

Jason Collins
Investor · Plymouth, MI · Member since 2015 · 13 posts · 3 votes

Hello. I've been a member of this site for a few years now, but am only now looking to get active here. I would appreciate if anyone might be able to help me narrow down my search area for my first rental property - either single family or a small multi-unit. Looking for advice from those that are familiar with southeast Michigan (Metro Detroit area). Trying to decide what city (or cities) are best to invest in. A few years back I remember reading that Redford, MI was actually a very hot area to invest in and had a great ROI. I'm not sure if that is still the case. Aside from the actual city of Detroit (where some houses are insanely cheap), what are some good areas to look in for a first investment property. Thank you!

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George P.
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
5y

I have rentals in all those... except canton

its all high man.. it's crazy. It doesn't cashflow anymore. Unless u find an off market deal and even then they stil need 50-60k in rehab to pass all codes

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  • George P.
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    5y

    i have 10 in Redford.. I think.. I can't remember. Prices aren't cheap anymore. They used to be 30k and now same house is 100-120

    make sure u know the difference between "old Redford" and south redford

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  • Jason Collins
    OP
    Investor · Plymouth, MI · Member since 2015 · 13 posts · 3 votes
    5y

    George - Thank you for the response - this is my first post ever!

    That's great news for your equity in Redford I suppose, but not the hot area I was hoping for to find excellent deals.  Any insights on where to look?  N.E. Livonia, Westland, Garden City, Dearborn Heights?  Possibly certain parts of Canton?  I appreciate your feedback!

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  • George P.
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    5y

    I have rentals in all those... except canton

    its all high man.. it's crazy. It doesn't cashflow anymore. Unless u find an off market deal and even then they stil need 50-60k in rehab to pass all codes

    1Reply
  • Jason JamesPro Member
    Rental Property Investor · Hillsboro, OR · Member since 2018 · 117 posts · 64 votes
    5y

    @Jason Collins I echo your struggle. I have 1 property in Harper Woods but  I've been actively looking in South East Michigan (Roseville, St. Clair Shores , Eastpoint , etc.), and the market is crazy hot. Some of the properties that I've offered on would cashflow, but there our multiple offers coming in over asking.  I do have some information for wholesalers, etc. which I will DM to you. A ton of the properties that they have been sending over are not in my area of focus but they may work for you.

    @George P. even with all the craziness, what areas would make the most sense near Redford? Also I would love to connect as I see you have a PM and construction company, which is also what I'm actively looking for in 2021. 

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  • George P.
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    5y
    Originally posted by @Jason James:

    @Jason Collins I echo your struggle. I have 1 property in Harper Woods but  I've been actively looking in South East Michigan (Roseville, St. Clair Shores , Eastpoint , etc.), and the market is crazy hot. Some of the properties that I've offered on would cashflow, but there our multiple offers coming in over asking.  I do have some information for wholesalers, etc. which I will DM to you. A ton of the properties that they have been sending over are not in my area of focus but they may work for you.

    @George P. even with all the craziness, what areas would make the most sense near Redford? Also I would love to connect as I see you have a PM and construction company, which is also what I'm actively looking for in 2021. 

     All those mentioned are amazing

    also Taylor, allen park, farmington hills.. some of dearborn too

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  • DJ M.
    Realtor · Southeast Michigan · Member since 2017 · 232 posts · 180 votes
    5y

    All of mine are in the downriver area. I stick to areas I know well, and its worked for me so far. 

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  • Mohamad Hamde
    Member since 2021 · 1 post · 0 votes
    5y

    @Jason Collins Hey! I'm actually looking in the same areas, focusing on SFR. I've been searching in Dearborn, Dearborn Heights, Redford, Westland & couple other cities within a few miles of those. The houses I found are within the 90/120k, tough to make a profit when you're leveraging a high mortgage. Some come in at 75k but coc is low and no equity upfront. Currently saving what I can so I'm ready for the right moment.

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  • George P.
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    5y
    Originally posted by @Mohamad Hamde:

    @Jason Collins Hey! I'm actually looking in the same areas, focusing on SFR. I've been searching in Dearborn, Dearborn Heights, Redford, Westland & couple other cities within a few miles of those. The houses I found are within the 90/120k, tough to make a profit when you're leveraging a high mortgage. Some come in at 75k but coc is low and no equity upfront. Currently saving what I can so I'm ready for the right moment.

    All true words

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  • Jason Collins
    OP
    Investor · Plymouth, MI · Member since 2015 · 13 posts · 3 votes
    5y

    Of course nothing is ever impossible, but it seems like it will take much more time and effort to find the right deals right now?  That's just the downside to a strong economy (aside from the recent downturn from the virus)?  Do those of you who are more experienced tend to purchase less properties when the economy is good and prices are up or do you look for alternative ways to find properties?  Any insights on wholesaling in this area?

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    5y

    Sounds like you want to stick to the suburbs.

    Best bang for your buck typcailly comes from the Ring Cities - those that touch Detroit. Each additional concentric RIng City usually has higher prices, but usually rents don't increase as fast as prices:( So, less attractive for cashflow, but often better for appreciation.

    You may want to follow our blog here on BP, as we're writing a series of articles on Metro Detroit cities and Detroit neighborhoods:
    https://www.biggerpockets.com/...

    Basic economics of supply & demand imply that the less demand for something, the lower the price. Regarding real estate this means you'll get a better price on an ugly property.

    So, you may want to consider researching FHA 203(k) loan, which allows you to buy a home that's not livable or needs work, but finance the repairs into the purchase mortgage. There's also a similar FNMA Homepath program (name may have changed).

    You can search the MLS for "handyman special", "fixer upper" or other key words to find these properties.

    Anyone can buy a property that's ready to rent. The more you put into an acquisition the more you'll accelerate your networth and cashflow.

    Contact us if we can be of further assistance.

    [email protected]248-209-6824
    Logical Property Management4.9469 Reviews
    WebsiteView Page
    1Reply
  • Jason Collins
    OP
    Investor · Plymouth, MI · Member since 2015 · 13 posts · 3 votes
    5y

    As I mentioned earlier, this was my first post on this website.  I had some great responses and some private messages as well - people genuinely trying to offer some help.  It is very much appreciated!  I look forward to becoming more active on this site.

    I do want to follow up to my original question. Can someone help my find some websites to follow, facebook groups to join, some real estate agents to contact, possibly some wholesalers to contact, or maybe even certain forums on this website? I did have someone send a message with a couple websites which is great, but of course would like to see what else might be out there. I want to start looking at as many properties as possible, and I'm not sure if calling a real estate agent who just looks at the MLS is going to be my best bet for finding good investments? Again, I appreciate the help!

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  • Amber Hooks
    Investor · Grosse Ile, MI · Member since 2017 · 37 posts · 4 votes
    5y

    @Jason Collins, have you done basic rental searches in Zillow, etc. to review how much rent rates are in various places? That’s a good indicator of areas that are high and low in general and you can then compare to house prices on the market.  

    For Facebook, ask to join the Metro Detroit Real Estate Investors Group. The group moves pretty quick and there’s a lot of wise a$$es in the group so be aware if you are easily offended. :-)

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  • Ken Taylor
    Flipper/Rehabber · Detroit, MI · Member since 2019 · 15 posts · 4 votes
    5y

    @Jason Collins the Detroit land bank have a lot of options but do your research first and use a team going on find the hot spots in the city there’s a lot of growth Amazon,quicken loans , Daimler C , midtown , etc work with in a mile of the preiameters is a suggestion !!

    0Reply
  • Jeff Hastedt
    Investor · Metro Detroit, MI · Member since 2020 · 7 posts · 13 votes
    5y

    Find an area you're comfortable with and look to invest there. There was a comment above about the ring suburbs. I agree but those have become quite expensive. I bought my first SFR rentals in Ferndale and Hazel Park 10 years ago...and look at those spots now! I invest downriver but even those communities are now expensive. The holdout was Lincoln Park(I have 3 properties here) and those are now consistently over $100k but you can still find a solid deal downriver if you're willing to put in sweat equity:) Westland and Garden City...great rental area but no longer cheap. You can still find some deals in Eastpointe and Harper Woods west of 94. South Warren too but it's really street by street there. If you prefer, Inkster and Pontiac has existing deals. I don't have any experience there unfortunately. Southern Dearborn Heights has a couple of deals(I just picked one up here last week). This is the part south of Dearborn but north of Taylor. Only because of proximity to Lincoln Park, I've glanced at Ecorse and there are deals there but I'm uncertain of the going rents. Decent housing stock though! Feel free to DM me any questions.

    1Reply
  • Courtney M.
    Lake Elsinore, CA · Member since 2018 · 235 posts · 300 votes
    5y
    Originally posted by @Jason Collins:

    As I mentioned earlier, this was my first post on this website.  I had some great responses and some private messages as well - people genuinely trying to offer some help.  It is very much appreciated!  I look forward to becoming more active on this site.

    I do want to follow up to my original question. Can someone help my find some websites to follow, facebook groups to join, some real estate agents to contact, possibly some wholesalers to contact, or maybe even certain forums on this website? I did have someone send a message with a couple websites which is great, but of course would like to see what else might be out there. I want to start looking at as many properties as possible, and I'm not sure if calling a real estate agent who just looks at the MLS is going to be my best bet for finding good investments? Again, I appreciate the help!

     In my experience, you will need to do some of the legwork yourself as well as show yourself as a qualified buyer in order for a broker to start working with you. I would start by figuring out the profile of what you're looking to buy. I personally have my own Zillow searches set up and will send the listings to my PM to ask them if this is an area they want to manage. SE Michigan is a great market (I have rentals in Westland and Taylor) but it can change street-by-street, so you'll really want someone familiar with the area and the rents.

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  • Jason Collins
    OP
    Investor · Plymouth, MI · Member since 2015 · 13 posts · 3 votes
    5y
    Originally posted by @Jeff Hastedt:

    Find an area you're comfortable with and look to invest there. There was a comment above about the ring suburbs. I agree but those have become quite expensive. I bought my first SFR rentals in Ferndale and Hazel Park 10 years ago...and look at those spots now! I invest downriver but even those communities are now expensive. The holdout was Lincoln Park(I have 3 properties here) and those are now consistently over $100k but you can still find a solid deal downriver if you're willing to put in sweat equity:) Westland and Garden City...great rental area but no longer cheap. You can still find some deals in Eastpointe and Harper Woods west of 94. South Warren too but it's really street by street there. If you prefer, Inkster and Pontiac has existing deals. I don't have any experience there unfortunately. Southern Dearborn Heights has a couple of deals(I just picked one up here last week). This is the part south of Dearborn but north of Taylor. Only because of proximity to Lincoln Park, I've glanced at Ecorse and there are deals there but I'm uncertain of the going rents. Decent housing stock though! Feel free to DM me any questions.

     Thank you for the info Jeff.  I will send you a pm to discuss further.  I appreciate your input!

    0Reply
  • Jason Collins
    OP
    Investor · Plymouth, MI · Member since 2015 · 13 posts · 3 votes
    5y
    Originally posted by @Ken Taylor:

    @Jason Collins the Detroit land bank have a lot of options but do your research first and use a team going on find the hot spots in the city there’s a lot of growth Amazon,quicken loans , Daimler C , midtown , etc work with in a mile of the preiameters is a suggestion !!

     Ken - thank you for the suggestions! Do you by any chance have a map of great areas and certain areas to avoid?

    0Reply
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