Best Returns in Detroit and neighboring suburbs

[Chris Tabanico]

Hello BiggerPockets Michigan!

I am currently investing in Arizona however, the margins are not the best anymore (imo).  Therefore, I am looking to branch out to Michigan and other areas where my money can go further. Looking for some advice on the best areas that are still yield excellent returns. I am primarily looking at B/C class neighborhoods and don't mind D if crime is relatively low. Let me know your thoughts on the topic. A few of you may be very active in the BiggerPockets community so be on the looking for connect requests from me!

Thanks!

Chris

[Greg Scott]

I have been amazed lately at the amount of people lately from around the world that are looking at Metro Detroit real esatate.  Because the city is coming back, it is making headlines so there is an assumption there are tons of profits to be made.

Reality is that many suburbs of Detroit have been vibrant real estate markets where you can make money if you know what you are doing.  But, money isn't falling from the sky.  You have to do the same kind of due diligence you would in any city to make good returns.

I've seen a lot of people buying anything with a Detroit city address, speculating that everything will go up.  There are about 4 square miles of downtown Detroit that have undergone a major reniassance.  If you bought property in these areas more than 5 years ago, you made a mint.  Prices are pretty high in those areas now, so speculate at your peril.  There are other areas in Detroit that were reasonably solid and since the recession have made a nice come-back and you can find good rent properties there.   There are also many neighborhoods that remain blighted, challenged neighborhoods.  On paper, those look like great cash-flowing properties, but reality is they will be difficult to manage and unlikely to provide projected returns.

In short, ignore the hype and do the same due diligence you would do anywhere.