Newbie real estate investor, what am I doing wrong?

[Max Lala]

I recently purchased a rental investment property in Dearborn Michigan for $70k and rented it for $900/month.

If I had gotten a 30 years loan on this property with %20 down, it would give me $250/month cash flow. (after taxes, insurance, estimated maintenance and management fees).

I have about $450K cash. Now the question is if I repeated this same process with 20 rental properties, it would cost me on average $17k per property (%20 downpayment including closing costs) $350K. $250/month * 20 = $5000/month, $60K year. I'd keep the other $100K for emergencies. 

$60k/year is enough for me to retire and this would be a %17 return on my $350K investment. Is this a good idea? Is there something I'm not thinking about? If you think this is a good idea, should I continue buying in the same area, or diversify with other states?

Thank you

[William SaintAmour]

I am familiar with Dearborn, and like all towns, there age good sections and not so good sections.  Having said that, Ford is getting ready to consolidate a lot of their global staff there, citizen satisfaction rates are well above state and national benchmarks (this is what I do professionally), and city leadership is smart, business savvy, and well aware of how to avoid the issues facing Detroit. The University of Michigan has a campus there, and there are many other companies and industries active in its economy.  

While Josh may knock Detroit, there are really excellent areas outside the City limits and across the state that are entirely different situations. Royal Oak, Ferndale, Oakland County, Ann Arbor, Kent County, and Kalamazoo are all worth a look.