Detroit BRRRR for out-of-state investor

[Rohmah Ismael]

Hi everyone, I'm Rohmah and I'm new to the platform as well as real estate investing. My goal for this year is to work on buying my first investment real estate property in 2025 and possibly a second before year end. I live in Seattle, WA but due to the limited inventory and high prices I want to invest out-of-state. I am not interested house-hacking. My primary goal for investing in real estate to grow my wealth and generate a bit extra income- not replace my day job.

As the first investment, I want a safe investment with a goal recycle my down payment for a second property within 12 months and focus on learning & long-term cashflow/appreciation. My budget for the first property is $50k ~ $100k total cost (including rehab). My strategy is BRRR, so with this budget and my goals, I ruled out WA and looking out of state. Following the BRRRR strategy and aligning to my budget and goals, I am looking at multifamily homes in Michigan (Detroit area). Also, I am looking into leaning in on Section 8. Any suggestions on how to get started, some risks to be aware of?

I am reading BiggerPockets forum. Some specific questions I have:

1. What should be the number first step after picking a market? I am looking at listings online, running my numbers. Many of them barely hit the "1% rule".

2. There are many properties out their but most within budget that I have seen on Crexi are already renovated so not ideal for BRRRR. What are other areas I can look into around Detroit or should I still focus on Detroit?

3. Assuming I purchased a property, how do I find renters? Do I lean 100% on the property manager to find renters? How do I know the vacancy rate / how long it took to find renters for comparable properties? This would be one of the most important inputs for "running your numbers". Are there any good property management companies that are familiar with Section 8? 

4. How difficult is the Section 8 process? Is it worth it?

5. I would like to "build a team" as an out of state investor (e.g. realtor, PM, general contractor, etc). How do I go about doing this? Who is the most important member/first I should focus on?

Would love to connect and if you have any other generic recommendation / tips are appreciated. Thanks in advance!

[Travis Biziorek]

Rohmah, good to see you diving into this. I’ve been investing in Detroit for years and built my 12-door portfolio there, generating $16K/month in gross rents. I lived in Michigan for five years before moving back to California, so I’ve seen firsthand how the market has evolved.

A few things from my experience:

• BRRRR still works in Detroit, but it's not as easy as it was a few years ago. Finding the right properties at the right price takes more effort, and appraisals can be tricky.

• Section 8 can be great for consistent rent payments, but it comes with its own challenges. You’ll want to be strategic about the neighborhoods you buy in and work with a property manager who understands the program.

• Building a strong team is key, especially for out-of-state investors. Who you work with will make or break your success.

If you’re serious about Detroit, I’ve put together a ton of resources that break all of this down in detail. Happy to share if you want to reach out!