What is wrong with Warren MI?

[Andrew Nordbeck]

I have been searching for markets to make my first real estate investments in. I am strongly considering Warren MI as that place because of the lower barrier to entry(I can invest in several properties right away),  cash flow positive, and the newly built Amazon distribution center. 

I was very excited until I listened to David Greene caution against investing in "cash flow mirages." He specifically mentioned Detroit. He did not give any reason as to why this idea of cash flow is mirage here. Can anyone help me understand why this may be a poor investment on my part?

[Drew Sygit]

@Andrew Nordbeck

We dealt with a lot of investors bashing Detroit:(

The number one reason seems to be that they didn't do proper research before making an investment that didn't go as planned. Too many investors didn't take the time to understand the Detroit market and bought a Class D property they thought was Class C or B. When it performed as a Class D property, they were upset. 

We make sure our clients are properly educated about what they are buying and we advise avoiding Class D areas.

For actual facts, you might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

https://www.biggerpockets.com/...