Detroit - Flips, Buy and Hold, or what

[Deshawn Peterson]

Hey All, 

I'm new to REI in Detroit. From my research, Detroit seems to be great for cash flow. From your experience, what REI strengths in Detroit? Would it be best to focus on flips, multi-family, STR, or etc?

[Drew Sygit]

Your profile doesn't state where you live or have much info about you at all. So will assume you live OOS.

Many OOS investors don't truly take the time to understand:

1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area.

2) The Class of the PROPERTY they are buying - which is relative to the overall area.

3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area.

4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area.

5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area.

6) That all of these Classes are usually vastly different than the local market they live in.

7) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS.

8) Class A is relatively easy to manage

9) Class B usually also okay, but needs more attention from owner and/or PMC

10) Class C can be relatively successful with enough attention from owner and/or PMC (do NOT hire the cheapest!)

11) Class D pretty much requires an OWNER to be hands on. A PMC should not try to manage as they will have to charge too much to make it worth their resource investment.
***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher.