How Has Your Investment Experience Been in Detroit?

Question

Hey BP Community,

I know the market has its pros and cons—affordable properties, strong rental demand in some areas, but also challenges like property management, vacancies, and neighborhood selection.

For those investing in Detroit:

• What strategies have worked best for you (buy-and-hold, BRRRR, flips, etc.)?
• What neighborhoods have you had success in, and which ones would you avoid?
• Any lessons learned or things you wish you knew before investing?
• How have you handled property management and tenant turnover?

I appreciate any insights you can share! Looking forward to hearing your experiences.

Thanks!

Drew Sygit · Answer

@Bennie Smith we've got a map at our website that we spent quite a bit on, to help investors understand what Detroit Neighborhoods they may want to invest in.

DM us to discuss more as Moderators may delete this thread if we cover too much here.

Drew Sygit · Answer

@Bennie Smith there's two parts to that:

1) We take on properties all the time and do a TakeOver Evaluation Video that we share with the owner.
- Many of them have no clue of the actual condition of their properties and a decent percentage want to then sell.

2) We have owners we terminate, that don't want to spend a penny maintaining their properties. Or they think we are somehow to blame and want to terminate us.
- Recent example: we took a vacant property over and did our TakeOver video, then gave the owner a bid for around $10k to get it RentReady. Owner only gave us $2k to work with, so we took care of Health & Safety issues (to avoid lawsuits) and did our best to spread out the rest to make the property look "decent". O course, can't find a tenant and have to beg owner to lower rent due to condition. Owner goes behind our back and contacts a competitor - but they call us as we're on good terms with them. They tell us the owner bad-mouthed us to them that we're taking too long to find a tenant. We give them access so they can take a look. They copy us on their response to the owner, that the property needs a LOT of work done before they will manage it.

A decent amount of owners never accept responsibility for their mistakes:(

Joe Hammel · Answer

Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, solid ROI, and yes plenty appreciation. (#1 appreciating city 2023). To answer your questions:

• -We’ve seen success with a wide variety of strategies; we have clients with buy-and-holds, house hacks, BRRRRs, and flips. I personally make well over $100k/yr cash flow from 21 buy-and-hold properties here. All of which, I’ve purchased within the last 4 years.
• 
• -In Detroit, it really is a street by street basis, but there are definitely plenty good deals to be found once you know the market.
• 
• -I’ve learned that there are 2 types of people who dog on Detroit..

1. People who don't actually own property in Detroit

2. People who did it wrong and weren't able to execute.

If you do it right, it’s arguably the best market to invest.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: .9%-1.4% rule deals

Coc ROI: 4-12%

Total ROI: 20-40%

Cash flow: $50-$250/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the “sweet spot” in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties in poor condition, because they pencil out to 2-3% deals on paper. We don’t buy those.

We have found what works and repeat it as much as funds allow.

Detroit has one the highest rent to price ratios in the country…and we focus on the best balance of price/location within the area.

• -Personally, I self-manage all of my rentals, all on mtm leases. You’ll always have tenant turnover/vacancies, but that’s why you account for it when you run your numbers.

Here is a picture of my portfolio if you/anyone is curious.

Travis Biziorek · Answer

I’ve been investing in Detroit for years and built a 12-door portfolio that generates $16,000/month in gross rents. My experience has been overwhelmingly positive, but—like any market—it depends on your approach, risk tolerance, and the team you have in place.

Detroit is unique. The affordability and cash flow potential are real, but so are the challenges. Neighborhood selection, property management, tenant risk, and rehab surprises can make or break an investor. The people who struggle here usually underestimate those factors.

One thing I do differently than most: I share actual performance data from my rentals—purchase prices, rehab details, rent numbers, lessons learned, and backstories. If you want real numbers and insights, I have a ton of resources on that.

Happy to answer any specific questions, but the short version? Detroit has been extremely good to me, and if you navigate it the right way, it can be an incredible market to invest in. But it’s not for everyone.

Feel free to reach out if you want some links to resources and/or more info.

Jaycee Greene · Answer

Hey @Bennie Smith, welcome to the BP Forum! One definite PRO about Detroit in terms of property management is working with @Drew Sygit...other than that, I'll leave that to others here in the forum.

Bennie Smith · Answer

Thanks Jaycee!

Bennie Smith · Answer

Hey @Drew Sygit, I work with a few investors regarding property management. I'm amazed at the condition of the property when it comes over. It seems like investors are not doing their due diligence and it's leaving a bad taste in their mouth.

How Has Your Investment Experience Been in Detroit?

How Has Your Investment Experience Been in Detroit?

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