Detroit Area Investors Question

[David Roth]

I recently started my REI venture in the Detroit area 1 year ago and I have been trying to figure out a good strategy for how to continue scaling while covering costs per property. The issue I'm running into is with taxes being so high and many properties having limited space or no garage, it seems difficult to profit or even net $0. Since I am a young professional, my strategy has been buy, move in to claim homestead benefits, rent rooms, then move out once I buy the next property. renting the whole home would be easier but obviously requires a lot more cash up front. Does anybody from the area or who has used a similar strategy have any advice on what/where to target to have an easier time collecting the rent I need to continue scaling?

Thanks in advance!

[Travis Biziorek]

Originally posted by @Paul S.:

Originally posted by @David Roth:

I recently started my REI venture in the Detroit area 1 year ago and I have been trying to figure out a good strategy for how to continue scaling while covering costs per property. The issue I'm running into is with taxes being so high and many properties having limited space or no garage, it seems difficult to profit or even net $0. Since I am a young professional, my strategy has been buy, move in to claim homestead benefits, rent rooms, then move out once I buy the next property. renting the whole home would be easier but obviously requires a lot more cash up front. Does anybody from the area or who has used a similar strategy have any advice on what/where to target to have an easier time collecting the rent I need to continue scaling?

Thanks in advance!

Ugh, you are trying to break into a market that has jumped the shark 10 years ago.  RO/Ferndale are over priced and honestly on the decline due to parking issues, stagnant entertainment/dining options and the popularity of Gilbert's fragile downtown bubble.  It sounds like you are low on cash as well so your only real option is diving into the city and pray you have the balls to make money and not be killed.  If you prefer to stay in the burbs I would recommend you get in on the tail end of up and coming Hazel Park... possibly or possibly North East Warren close to the Amazon complex.

And David - you need to get a better strategy honestly - renting out rooms is going to bring you nothing but headache.

And don't mind Paul. He's a big, cuddly bear in real life. But he does have a point. The areas you listed got hot, and they're better suited towards flips at this point unless you believe in, and want to ride, future appreciation. 

Definitely look around areas he mentioned, but stay out of the city. I'm trying to buy it all.