Investor · Bakersfield, CA · Member since 2015 · 161 posts · 46 votes
It seems there are great deals in Michigan, especially in the Detroit metro area and fanning out to the west. However, being from California I don't know much about this area, other than the public info available about how vacant it is, crime, and the like. However, I've seen a number of people on BP mention Michigan and occasionally Ohio.
Do you invest in Michigan, and if so, can you give me some pointers on the plusses/minuses of doing so as an out of state investor?
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
10y
I've been investing in MI for years. Must have "boots ob the ground" that knows where to, and where not to invest. I've formed many partnerships with out of state investors to this end as well.
There are some great areas under $60k that will cash flow tremendously...that's if you like to cash flow over $400/month with financing in place...and a PM.
Investor · Ventura, CA · Member since 2016 · 24 posts · 9 votes
10y
I grew up in southeast Michigan, north of Detroit, so I know the area pretty well. I would recommend the suburbs but I stay out of Detroit proper. Roseville, Eastpointe, Fraser, and Macomb County in general are fairly safe and inexpensive. I have a rental in Eastpointe cash flowing very well even after P&I and all expenses. Looking to pick up at least one more in Macomb County very soon. Oakland County is more expensive depending on the area, including some very high end homes but you can find some good deals there as well.
Rental Property Investor · Chico, CA · Member since 2016 · 633 posts · 336 votes
10y
@Account Closed.....Russ, Michigan is incredible but like anything you must be familiar with it or have someone that is familiar with it. not only Detroit but most the other major metros have great opportunities. Grand Rapids, Ann Arbor (bit pricey though), Kalamazoo, Lansing and Northern Michigan in Traverse City and Petoskey. Great areas but each is vastly different. Grand Rapids is the new "IT" metro area in Michigan. Kalamazoo, Lansing (East) and Ann Arbor are college towns so great rentals. Ann Arbor is the town similar to a California in way of thinking and price as well. Ypsilanti (next to Ann Arbor) and Grand Rapids have colleges but aren't college towns like the others. Metro Detroit has several colleges (Wayne State and Oakland which is out a bit in Rochester Hills) but aren't college towns. Traverse City just was voted best town in America. Home of the Sleeping bear Dunes. Traverse City is very seasonal but now has a year round population. Petokey is seasonal as well and home to Hemingway and his haunts. They call Bay Harbor "The Riviera of the Midwest". The most beautiful fresh water you will ever see in your lifetime. No kidding. Mackinac Island is Michigans # 1 tourist destination and a Top 10 Island in the United States. No cars allowed and only horse and buggy. Get to the Island via boat or plane. At any rate many options in Michigan just KNOW THE AREA! YOU MUST KNOW THE AREA!
Investor · Ventura, CA · Member since 2016 · 24 posts · 9 votes
10y
I agree with knowing the area. Certain cities around Detroit can have a bad area you want to stay away from, but also a decent area. If you're looking around metro Detroit hit me up and I can try to answer questions you may have.
violinist · Detroit, MI · Member since 2015 · 30 posts · 4 votes
10y
I have been living in Detroit for over 20 years and completely agree with what Brian and Dylan are saying about knowing the area. There are some really nasty parts of Detroit (where I live...) but 10 minutes away, on the right street, and you're in a gorgeous neighborhood. Location is very important. I'm moving to Kalamazoo next month and was analyzing some deals and have to say there are A LOT of rentals aimed at college students.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
10y
Come on down to Milwaukee! Theres enough to go around. 53212, 53209, 53210 and some other zips. If your looking for a deal this is where I would look. Cash flow, don't look for appreciation in this market.
Real Estate Broker · Tampa, FL · Member since 2016 · 41 posts · 13 votes
10y
Yes! Agree with everyone here! I am also a Detroiter and I have a family member who invests and runs a PM company there. You will waste time and money in the wrong area of Detroit if you do a lot of work and then have it all snatched out by vandals. Unless you plan to arm the home with some good security features, work with someone who knows the area or stay out altogether.
I am also available as a resource.
Real Estate Agent · Portage, MI · Member since 2014 · 18 posts · 5 votes
10y
I'm a realtor and investor in Michigan. I live in Kalamazoo, and I'm familiar with Ann Arbor and Lansing too. If I can assist anyone with finding a good rental property, please message me!
Bakersfield, CA · Member since 2016 · 378 posts · 307 votes
10y
Bakersfield is widely considered one of the best, if not THE best, investment market in California. I mean, yeah you can find great investment deals in virtually every state. I'm not sure why anyone from Bakersfield would want to invest out of state though...
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
10y
I've been investing in MI for years. Must have "boots ob the ground" that knows where to, and where not to invest. I've formed many partnerships with out of state investors to this end as well.
There are some great areas under $60k that will cash flow tremendously...that's if you like to cash flow over $400/month with financing in place...and a PM.
Specialist · Ann Arbor, MI · Member since 2016 · 356 posts · 191 votes
10y
I've lived and worked in Wayne, Oakland, and Washtenaw counties in southeastern Michigan. I do think it is a great place to invest. I currently live in Ann Arbor, which I agree has some similarities to the California market--Plymouth, Northville, Birmingham are similar. Within an hour or so of me there is a full range of Class A-D cities/neighborhoods, where you can get great cash flow and/or appreciation.
I've been investing in MI for years. Must have "boots ob the ground" that knows where to, and where not to invest. I've formed many partnerships with out of state investors to this end as well.
There are some great areas under $60k that will cash flow tremendously...that's if you like to cash flow over $400/month with financing in place...and a PM.
Yes, please! I have relatives in Paw Paw, and have considered Kalamazoo...where is this magical cash flow fountain of which you speak?!
Bakersfield is widely considered one of the best, if not THE best, investment market in California. I mean, yeah you can find great investment deals in virtually every state. I'm not sure why anyone from Bakersfield would want to invest out of state though...
How are the numbers looking in Bakersfield? I'm surprised it would be a a great Rental market but my ears are open.
Ypsilanti, MI · Member since 2016 · 17 posts · 6 votes
10y
@Teddi Henry, I'm still new at this so please forgive my ignorance. What is a heat map and where do I find them?
@Russ Beck, I live in Ypsilanti, MI, and as I am sure you are aware, neighborhoods can change very rapidly from decent to, I-wouldn't-walk-there-after-9pm in a very short distance. I would definitely recommend either checking out the area you would like to invest in for yourself or partnering with someone who knows the area well.
Real Estate Agent · Redondo Beach, CA · Member since 2016 · 36 posts · 6 votes
10y
I agree with what majority of people said about Michigan. Being from California and growing up in Michigan and going to Michigan (Ann Arbor). I have grown to appreciate Michigan and have a few buy/hold condos in Oakland County. I actually partnered up with a realtor whose clients are from Japan. A lot of young professionals participate in a 2 year rotation with Hyundai (I believe Google and Toyota are going to be in the area soon) live in these areas and basically the company pays the rent.
So in summary there are areas in Michigan that are great deals just research the area.
Engineer · Suwanee, GA · Member since 2013 · 127 posts · 47 votes
10y
@Account Closed is very well seasoned and sums it up very clearly for you. Work on having boots on the ground that know where to go. How do you get it? Advice: Show the money..
Being outside without someone on the inside you will never be first to the deal. Build the team and put the time into finding people you trust and you can do incredible things with the MI market. If you stick to doing research online,and never experience MI yourself... You will always be behind local investors that are killing it. Best of luck with your ventures :-)
Bakersfield is widely considered one of the best, if not THE best, investment market in California. I mean, yeah you can find great investment deals in virtually every state. I'm not sure why anyone from Bakersfield would want to invest out of state though...
How are the numbers looking in Bakersfield? I'm surprised it would be a a great Rental market but my ears are open.
It's a great rental market. Rents are relatively high (yeah, it's super hot central CA but it's still CA) yet purchase prices are still much lower than the rest of CA, with the exceptions of a few ghost towns where nobody wants to live. The key to finding good rentals here is to stay away from SFRs and stick to small scale multi-units. SFRs are easier to manage - only one tenant - but the cash flow is minimal for the same purchase price (and therefore the same mortgage payment) as a multi-unit which gets twice the rent amounts and twice the cash flow. A $200,000 home will usually cash flow two or three hundred dollars every month, while a $200,000 triplex or fourplex will cash flow well over twice that.
I found a deal the other day for an investor client from San Diego looking for multi-units here in Bakersfield - it was a fourplex that gets $2600 a month in total rents, and they accepted our offer for $205,000. That's 1.3% rent/purchase ratio right there, which I'd say is on the top end of what you can find with small scale multi-units (2-4 units) here. So after taxes, mortgage payment, utilities, and other monthly expenses, I estimated the cash flow on that one to be about $1,000 each month.
Note that the minimal cash flow problem with SFRs may be specific to CA because of high purchase prices versus market rents. That's why I always recommend small scale (2-4 unit) multi-unit properties for investors that just want the cash flow. I've heard that in parts of Michigan there are good cash flows from SFRs because the purchase prices are very low to begin with.
Investor · Chicago, IL · Member since 2013 · 2k+ posts · 1k+ votes
10y
Of course lots of folks in Michigan will encourage you to invest there. Before you do, I suggest:
1. You actually VISIT the different cities as part of your research. You have to know WHAT you're investing IN. This means you need to understand the MARKET. What you see from "paper research" or doing research on the internet is nothing compared to visiting the place and getting a feel of it.
2. I agree with @Joe Villeneuve: you got to have BOOTS on the GROUND. I only invest out of state if I know and trust a local person who will be my hands on partner. You have to know WHO you're investing with. Is the person you're about to invest with a one-man show or does he have a team of Property managers, project managers, acquisition and sales personnel, etc.? What's this person's experience level (number of years investing, how many deals has he/she done, etc)?
The numbers (ROI, cap rate, cash on cash return) is just one aspect of real estate investing. Without an intimate knowledge of the market AND a good BOOTS on the GROUND team, you should NOT invest in Michigan or any other state for that matter.
Dearborn, MI · Member since 2014 · 35 posts · 18 votes
10y
The burbs are great, but if you want lucrative cash flowing properties, check out Detroit. There are what I like to call spill over areas, which border already established, high rent areas such as Midtown, Corktown, Woodbridge, Downtown proper.
We've had great luck in these areas as many people would like 1) cheaper rent obviously 2) a backyard 3) a pet, 4) off street parking. Many of these downtown areas do not offer that.
I do agree you must have boots on the ground, you must have a trusted PM and you have to have a good team for all of this, but that's pretty much every other area too, right?
Max Gradowitz
What kind of location was that fourplex?
I'm from San Diego and looking into multifamilies as well.
Thanks
"C" class neighborhood. Kind of run down. Wouldn't live there myself, personally. But it's the perfect area for rental properties from an investor's standpoint.