Investing in Detroit

13 Replies

What does everyone think about buying and holding in Detroit? I didn't do a lot of research on this yet. However, I know Detroit properties are really cheap and they don't all seem to be in the bad of condition. Is it worth it? Has anyone invested there yet or have an opinion at all? Thanks.

There have been a lot of articles published lately in the national press about Detroit real estate. There's plenty of cheap everything available. The demand side is the big question. Money is still leaving town.

Like any other place you have to know the market but especially here. Detroit has drastic changes from block to block and although there is an abundance of opportunity in certain situations it's not worth it. When you purchase 5k homes you attract 3k tenants. The suburbs of Detroit are a bit more expensive but are a great opportunity because they are still undervalued. Happy investing.

I live just North of Detroit. There are many who do very well investing in the City itself (I invest mainly in the suburbs). If you invest in Detroit you must know the neighborhoods or have someone trustworthy on the ground who does. In terms of geographic area Detroit is one of the largest cities in the Country. If I recall correctly, it is larger than New York, Boston and San Fransisco combined. Some areas are quite nice--some are downright dangerous. The boundaries of these areas are constantly shifting. I live here and don't invest in the City unless I am partnering with someone who knows the City well. There are lots of people who claim to be experts--some of those are scammers. If your Detroit partner lives in San Fransisco you might want to do a bit more due diligence.

John, I've been reading a lot of those articles. However, i'm still on the fence.

Alton, thanks for the info. if I decide to invest in Detroit, you might be the first I reach out to.

Does the suburbs have prices anything like the city?

You're not going to find the 5k homes in the suburbs. The prices will be higher but the peace of mind you will have is priceless. Depending on how far you go from Detroit you can find homes for 20k and up although the 20k homes are in better areas than Detroit they still may not be the most favorable. The individual investors tolerance for risk has a lot to do with investing around the area as well as any other location. I personally do have a rental property located right off of 8 mile which is the border and it has served me well thus far.

Prices in the suburbs are higher, multiples higher in some of the nicer suburbs. In return you get higher rents (have you heard about the 2% rule that is talked about on BP? You can still find that in some of the suburbs) and more stable tenants. I only have 9 rentals now--3 of my tenants have stayed over 4 years, 2 have stayed 5 years.

Originally posted by @Anthony Smith :
I know Detroit properties are really cheap and they don't all seem to be in the bad of condition. Is it worth it? Has anyone invested there yet or have an opinion at all? Thanks.

You will get many different opinions on this matter. It's definitely not a city to invest without having someone with their feet on the ground here locally.

I would almost steer clear of anyone claiming to be an 'Expert' at anything let alone Real Estate. Also steer clear of anyone claiming that 'Their Way is the ONLY Way' to make money. We all invest using our own strategies, plans and goals. What works for me may not work for you and vice versa.

Surrounding cities still have some deals as well. Even under the $10K mark as long as you are willing to rehab the property. You can invest in surrounding cities still for all-in-costs of $30K or less although it is getting harder to do so.


My recent purchase was for $6K. Total costs will be under $25K and will rent for $800 a month. Not a warzone or high crime area, not Detroit, just a low income working class neigborhood. With a good process setup and nice properties you will still retain long-term tenants as many do in higher priced areas.

Obviously different areas will bring higher purchase prices. But your budget will determine the areas you can afford to safely invest and earn a great ROI.

Some great locals other than myself are @James Ross , @Michael Dundon , @Jay Wright , @Josh Sterling and the list can go on. We are all local, have multiple properties that generally don't cost an arm and a leg and know our specific markets well on the outskirts of Detroit.

I do know two investors locally that invest solely in Detroit. They do constantly battle theft even in some of the better neighborhoods. The one investor pays someone to stand outside and watch the vehicles and tools all day and pays someone to also stay at the house over night to prevent break-ins but he invests even in the areas where many won't but still have lots of people who live there and have no where else to go.

Thanks for all the advice everyone. I had no idea Detroit would be that much of a challenge. I prefer low priced 40000 or less properties. However, I don't want all the problems. I'm beginning to think I should just stay investing where i'm at.

@Anthony Smith

If you're going into a >% sleepless nights investment within an area like low priced Detroit homes, a solid property manager is a must have IMO. One who will make weekly onsite visits, even daily when rehab is in order, and always be on call if needed.

I got lucky and found such property manager in the Detroit area, so if you want her info, send me a private message and you can speak with her directly.

Originally posted by @Anthony Smith :
Thanks for all the advice everyone. I had no idea Detroit would be that much of a challenge. I prefer low priced 40000 or less properties. However, I don't want all the problems. I'm beginning to think I should just stay investing where i'm at.

You have that much you can buy a few houses in the burbs and have way less hassle. Why would you want to deal with a city in shambles. Don't listen to all the people talking about Detroit making a comeback. The places that are booming in Detroit you don't have the money or the connections to get in the game.

Come for a visit and I will take you on a private tour.

Got to love the people talking about Detroit being a good possible investment city and in the same sentence say its bock to block. Well the problem with block to block is that the bad blocks never change to good blocks, But the good blocks go to **** real fast.

Anthony there are excellent opportunities to make money in Detroit. If you want to invest in the inner city you want to go with section 8 turn key rentals or senior citizens on a fixed income (guaranteed cash flow). If you want to go the fix and flip route, subdivisions such as Palmer Woods, Sherwood Forest and Indian Village will fit you well. In the suburbs you will have more exit strategies depending on the ARV, rehab cost and a few other variables that may effect the investment. I'm a local investor in the area.

There are other areas you can buy turnkey properties under 40k.  Everyone thinks detroit because it is just in the press a lot.

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