All Forum Posts by: Travis Biziorek

Hey Marc,

HELOCs are best used for value-add strategies like BRRRRs or flips—situations where you expect to get most or all of the cash back relatively quickly. Using a HELOC as the down payment on a traditional rental just leaves you 100% leveraged and carrying a second payment with no clear path to recoup the cash. In most cases, your HELOC interest payment will eat up the entire cash flow (or more).

I used my HELOC pretty aggressively to build my Detroit portfolio—12 doors, all BRRRRs. Once stabilized, I had very little left in the deals, and the cash flow paid down the HELOC balance within about a year after I stopped buying.

So, in short: if you're going to use a HELOC, make sure it's for something that gets your money back out (or at least most of it). Otherwise, it can become a long-term weight on your portfolio.

Hope that helps.

Sounds about right, yes. But you have to consider it was starting from a very small base.

Detroit has been on the upswing for over 10-years now.

This will just be fuel to the fire!

The only thing I'd add to Drew's post is that the city of Warren is notoriously difficult to work with from a landlord perspective.

Everyone I know, and every client I've worked with, that's ended up investing there has complained about how picky they are on inspections... and that's putting it mildly.

We used to do a lot with Legacy but now it's more Regions and Title Inc.

For reference, we're doing 120-150 wholesale type deals in Detroit per year.

 Almost always two in these. It would be an exception if there was just one.

Hey Ivette — great question, and one I see a lot of new investors wrestle with.

I actually wrote a full post on this recently because it’s such a personal and nuanced decision. The short version? There’s no single “best” place to invest—only the best place for you.

Here’s the framework I suggest:

1. Start with your goals.

Don’t just chase what others are hyping. Get clear on what you want (e.g. cash flow vs appreciation), how much, and in what timeframe. Your market needs to match that.

2. Favor markets you know.

Where you live is usually your best competitive advantage. But if that doesn’t work, look at places you’ve lived, have friends/family, or already know. Local knowledge and a network go a long way.

3. Make sure it’s viable.

Run the numbers. Do you have the capital to play in that market? Does your bandwidth match the strategy you’re trying to use? I originally thought I’d invest in Ann Arbor—until I realized the returns didn’t match our goals. We ended up investing in Detroit instead because it made more sense financially and logistically.

Bottom line:

The best place to buy rental property is the one that aligns with your goals, experience, and resources. Ignore the noise and build your own conviction—that’s what’ll keep you going when it gets hard.

Happy to share the full post if you want a deeper dive.

Cole, there's a lot of good advice on this thread already. Out of state investing can be tough, but a lot of the horror stories are also due to people rushing into it.

They look at these cheap properties and think "how bad could it get?" They come into the market overconfident and having done little due diligence. I can tell you how this ends 9 times out of 10... 

That said, you can grossly stack the odds of success in your favor by treating it seriously and finding great people to work with.

I own 12-doors in Detroit and live in California. It's been fantastic to me. 3 of my tenants are Section 8. They don't destroy my homes. Everyone else pays rent on time or pays the late fee when they don't.

My point is, these markets can definitely be lucrative and you can be successful. But they can also be disasters. I've seen it all, and I'm happy to share more about my experience if you'd like.

Got it. I would look at what makes sense for you and not other people's opinions or arbitrary rules. If you're happy with a 4% CoC, potential appreciation, and mortgage pay down... who's to say it doesn't make sense?

I know it's tough, but try not to let others' opinions influence you. Everyone is at a different spot in their journey and what makes sense for someone may not make sense for the next person.

I've never heard of them and I do a LOT in Detroit.

Drew hasn't heard of them, and he does a LOT in Detroit.

I'm not saying they are bad, but they are either newer or aren't doing a lot of business in the city. 

You have to be extremely careful who you work with in Detroit.