All Forum Posts by: Michael Smythe

Detroit is unique, as it has 119 neighborhoods spread across Class A, B, C, & D properties.

Section 8 tenants would take Class A properties if they could, but the rent is too high for their vouchers. Some can get into Class B properties, but most end up in Class C properties. 

I don't know the Philly market at all, just trying to help you out with basics we know from the Detroit market.

Along those lines, would not recommend any application or approval shortcuts for S8 applicants. Make them go through the same process to filter out the bad ones.

@Jordan Tinning recommend you start by contacting local PMCs in your area that are also members of NARPM.

@Marc Possoff we're in the Detroit area, so can't help with your market specifics.

Section 8 basics though, apply to all markets.

We do see something similar in our market though, where S8 rents are higher than a neighborhood's average rent. This is because S8 vouchers aren't zip code limited. 

The trouble an investor can get into though, is assuming they can attract an S8 voucher holder to their property in a less desirable neighborhood. This rarely happens in our experience due to the S8 voucher holders consistently choosing better neighborhoods. 

I work with Drew.

Statistics have a way of evening out over time, but hope your results stay ahead of the curve:)

@Mo Maktari Inkster is a Class B & C city.

Your property appears to be Class C from the price, but you may be referencing Class B rent amount.

You'll find out more once you actually rent out the property. 

Also, make sure you fully understand Class C tenants and set your expectations accordingly.

This is why it's so important to ask more detailed questions about HOW a PMC will execute their services!

Most investors make the mistake of assuming all PMCs execute their services exactly the same.

Also important - how are they organized internally?

@Eli Kim Vacant properties in the Class C areas of Detroit are broken into, mechanicals and more stolen and there are often squatters.

All the other posters are incorrectly projecting their experiences in their markets, to a market they know nothing about.

Even boarding up a Detroit property won't protect it. We recommend to our clients to remove the mechanicals until a tenant is placed.

ALSO, PLEASE DO NOT LUMP SUBURBAN DETROIT CITIES WITH THE CITY OF DETROIT!!!
Our suburban cities are just like any other USA city. 
The City of Detroit, is unique and rebounding.

@Kurt Lane

Even if someone give you a referral, don’t make the mistake of assuming that PMC will meet your expectations, just because they met the expectations of the referral source.

We also can’t believe how many owners hire the first PMC they speak with!

Then they complain their expectations aren’t being met!

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – and they often select the first PMC they call!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

@Ajay Malhotra

You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

https://www.biggerpockets.com/member-blogs/3094/99854-deep-dive-into-metro-detroit-cities-ecorse

Doubt you'll find this much info for any other market in the country. So, why would you invest remotely anywhere else?

Basic rule of investing in ANYTHING:

Risk is tied to reward!

Higher rewards, typically require higher risks.

You seem to be looking for an investment with little risk, but expecting a great reward.

Those take time, patience and lots of networking to find.