Rentals in Detroit

[Patrick Ballinger]

Hey guys I got a question about rental real estate. I was thinking about investing in some of the cheaper homes in Detroit. I have construction work history and I currently work for a property management company. I know that most of the 5k and cheaper homes are in crime ridden neighborhoods and was wondering if hiring a private security and a property management company would help lower crime rates as well as help people take care of these neighborhoods. I am currently emailing for prices and have learned through the web that most of these houses were foreclosed on due to not receiving basic government essentials which led to people not paying taxes. Do you think this would help at all if it was affordable. Any feedback would be appreciated.

[Marvin Rice]

I would be very careful investing from a distance here. I am from here and I hesitate to invest in the city anymore. I have taken some serious losses in the past. Cash flow is awesome until you get a vacancy. Then you are working hard to keep you house from getting gutted overnight. At one point no one would provide insurance in the city. Your only option was Michigan Basic and it didn't cover much. I had 2 SFRs burned down, a duplex burned down, and a 20 unit burned down (this was before rehab was complete and it was next to a church). I have had a house gutted including the new windows before I could get a tenant in it. Had to rehab it again! Had I evict a tenant and the furnace and hot water heater was stolen the next day. I had spent time with the neighbors, joined the block club, and gave EVERYONE my number but no one bothered to call when they saw guys hauling my stuff away. They told me about it later.
I'm not saying you can't make good money in Detroit. I am quite sure now that I am a little older and wiser I could pull it off. But it is much harder than people would lead you to believe. Many seasoned players get burned in this market