Multifamily Rental in Detroit

[Mario Ortner]

Hello everyone, I live in LA and have about $120,000 in cash to invest. I've been reading about Detroit for the last year or so and although it's going to take years to get out of the fiscal mess, I believe the outlook it is going to improve steadily over the next 10 years. Having said that, I believe you buy in times of distress and ride the recovery.  I plan to visit Detroit in September to visit some of the promising neighborhoods and would appreciate any tips about best upcoming locations and number of units I can get for that money. Thank you all.

[Matt Souza]

Hi @Mario Ortner

First off, it is important to distinguish between the city of Detroit and Metro Detroit, two very different markets. The city is tough for remote investors, it requires strong knowledge of the area, can easily buy in a bad neighborhood, and tends to have a more challenging tenant base. That said, there are great returns to be made here if you are smart, $120,000 could probably buy you 6-10 SFHs or a decent size multifamily property.

Metro Detroit is a completely different market. There are a lot of strong rental neighborhoods that are safe, with great blue-collar tenants. Depending on where you buy, you can see good returns around the 15%+ mark. $120k there could probably get you 2-3 doors.

Feel free to reach out if you want to discuss more. I focus on Metro Detroit, so would not be very helpful if you are looking into the city. Best of luck!