Hey, BiggerPockets. First timer here, I live in Seattle, WA houses here are too expensive to make a mistakes for first timer, so I am considering start small from more affordable areas, like Detroit Metro Area or Cleveland, or maybe other locations more seasoned investors can recommend.

My wife and me work in tech, we were considering house-hacking with 2-3-4-plexes, but risk is too high here and reward is too low, Seattle is not landlord friendly and we like to have flexibility. I read couple of books about REI, and I understand that during first years of investing I may do more mistakes and I want to make them frugal.

We recently came to the US, and have around 150k of cash on HYSA and some stocks, that I believe smarter to not sell to have different type of assets for diversification.

I do not want spend my W2 income to cover house mortgages, to not have pressure if things like layoffs will happen, so my plan is to buy house in a good neighborhood that may have appreciation and some minimal cash flow after all expenses (management, maintenance and vacation). I know that I can put bigger downpayment and make it work, but ideally put 20% down.

In Detroit Area, I consider East English Village, Bagley, Detroit University, to buy first house turn key around 150-200k, than after I gain some experience(~6 month) with just renting, go to the next level of complexity and do BRRRR there with people who I can trust after first deal.

I understand that team with their boots on the location is crucial, so I am planning to fly there for couple of days/week and team up offline first and then do business remotely.

I was also looking on the Ohio market, as Cleveland or Columbus. But I like idea that Detroit, gaining it's momentum of renaissance and appreciation could be better there, but maybe I idolize it.

Columbus seems lucrative with tech companies investing there, but a bit fishy, because so many flippers already there, so many people realtors/flippers tryin to sell their flipped houses. Not sure I understand why they just don't want to rent them and gain appreciation, if it that good. Houses there twice expensive that in Detroit and I can afford them, but the risk to buy poorly fixed flipper is seems too high(I've seen couple of bad flipped houses for sale, that had some issues with permits after fixes).

Cleveland seems similar to Detroit. Due to high crime property should be picked block by block, and not by zip code. But because Detroit has bad reputation in the media, I believe many investors would avoid it and I may have lesser competition, in comparison with Cleveland.

So my questions are:

1. Am I delusional to have turnkey investment with 20% down, managed by the manager, with minimal cash flow(100-200$) in A- B+ neighborhoods that have a chance of appreciation?

2. Why are so many flippers in Columbus? Why they trying sell so hard and not rent out their properties?

3. What's better for first timer Cleveland, Detroit or something else?

4. Any specific red flags to identify bad actors and avoid doing business with them in these areas? I do not like when people sell me too much, but I understand that it could be cultural difference.

I will appreciate your pieces of advice!

Detroit, Michigan

7 Votes