Rental Property Investor 路 Arizona/Ohio/Michigan 路 Member since 2018 路 51 posts 路 36 votes
Hello BiggerPockets Michigan!
I am currently investing in Arizona however, the margins are not the best anymore (imo). Therefore, I am looking to branch out to Michigan and other areas where my money can go further. Looking for some advice on the best areas that are still yield excellent returns. I am primarily looking at B/C class neighborhoods and don't mind D if crime is relatively low. Let me know your thoughts on the topic. A few of you may be very active in the BiggerPockets community so be on the looking for connect requests from me!
Rental Property Investor 路 SE Michigan 路 Member since 2014 路 4k+ posts 路 6k+ votes
8y
I have been amazed lately at the amount of people lately from around the world that are looking at Metro Detroit real esatate. Because the city is coming back, it is making headlines so there is an assumption there are tons of profits to be made.
Reality is that many suburbs of Detroit have been vibrant real estate markets where you can make money if you know what you are doing. But, money isn't falling from the sky. You have to do the same kind of due diligence you would in any city to make good returns.
I've seen a lot of people buying anything with a Detroit city address, speculating that everything will go up. There are about 4 square miles of downtown Detroit that have undergone a major reniassance. If you bought property in these areas more than 5 years ago, you made a mint. Prices are pretty high in those areas now, so speculate at your peril. There are other areas in Detroit that were reasonably solid and since the recession have made a nice come-back and you can find good rent properties there. There are also many neighborhoods that remain blighted, challenged neighborhoods. On paper, those look like great cash-flowing properties, but reality is they will be difficult to manage and unlikely to provide projected returns.
In short, ignore the hype and do the same due diligence you would do anywhere.
You want to flush your Phoenix profits down the 馃毥 on D class Detroit property.
Why?
You should stick to the class you have in Phoenix.
Eric, you do realize that Michigan is not in Detroit?
No.
I basing my statements on his being 馃憣 with D class.
Yep, I agree there. Problem is, Detroit is actually made up of a lot more than D Class. The bigger problem, is how many out of state investor get stuck with the D Class because they don't know how to find the rest.
Rental Property Investor 路 SE Michigan 路 Member since 2014 路 4k+ posts 路 6k+ votes
8y
I have been amazed lately at the amount of people lately from around the world that are looking at Metro Detroit real esatate. Because the city is coming back, it is making headlines so there is an assumption there are tons of profits to be made.
Reality is that many suburbs of Detroit have been vibrant real estate markets where you can make money if you know what you are doing. But, money isn't falling from the sky. You have to do the same kind of due diligence you would in any city to make good returns.
I've seen a lot of people buying anything with a Detroit city address, speculating that everything will go up. There are about 4 square miles of downtown Detroit that have undergone a major reniassance. If you bought property in these areas more than 5 years ago, you made a mint. Prices are pretty high in those areas now, so speculate at your peril. There are other areas in Detroit that were reasonably solid and since the recession have made a nice come-back and you can find good rent properties there. There are also many neighborhoods that remain blighted, challenged neighborhoods. On paper, those look like great cash-flowing properties, but reality is they will be difficult to manage and unlikely to provide projected returns.
In short, ignore the hype and do the same due diligence you would do anywhere.
Rental Property Investor 路 Arizona/Ohio/Michigan 路 Member since 2018 路 51 posts 路 36 votes
8y
Thanks Joe and Eric. I'm a buy and hold SFH guy. In Detroit, I'll be sure to avoid the D class neighborhoods. I would like to invest in Michigan (not necessarily Detroit but don't mind it if the ROI is right). I'm looking to get better returns (>$400) a door which I believe can be done more easily than in Phoenix metro area with a perk of buying free and clear sub-100K.
Rental Property Investor 路 Arizona/Ohio/Michigan 路 Member since 2018 路 51 posts 路 36 votes
8y
I agree 100% @Greg - I realize I am late to the party but I still think there is money to be made in Detroit and neighboring areas. By no means do I believe money is falling from the sky. As with any market, it takes hard work and proper due diligence to avoid being in the red.
Thanks Joe and Eric. I'm a buy and hold SFH guy. In Detroit, I'll be sure to avoid the D class neighborhoods. I would like to invest in Michigan (not necessarily Detroit but don't mind it if the ROI is right). I'm looking to get better returns (>$400) a door which I believe can be done more easily than in Phoenix metro area with a perk of buying free and clear sub-100K.
I also have Detroit suburbs in my list. The key is the ability to learn markets to find micro-markets within them. Your goal is very achievable, in one of the many micro-markets found here.
Realtor 路 Detroit, MI 路 Member since 2018 路 387 posts 路 129 votes
8y
I agree, Detroit itself still has great deals that come on the market daily. Also the metro area. Don鈥檛 get discouraged by negative comments about the city. It鈥檚 a business risk just like every city. I have bought and sold many homes as an agent/investment. Most of them were wins
Investor 路 Detroit, MI 路 Member since 2014 路 360 posts 路 354 votes
8y
Rule of thumb, if you see a wholesaler trying to push a property in Detroit here, it's probably not a good neighborhood. Look one to two neighborhoods over in all directions. You will find your deal.
Anything in the suburbs under 100k is a solid buy with due diligence. Just always hedge your purchase and rent expectations.