[PNWGuy]

I have an opportunity to purchase property in Pontiac. I know there are some OK and many not-so-OK places in Pontiac, was wondering if I could get some local opinions on two areas to see where they fit in. i.e. Under what circumstances would make *you* want to live there.

One property is located on W. Princeton, which is east of Creger Lake and south of W. Walton Ave (Dupont Heights area).

Another property is located just southwest of Terry Lake and north of Cesar E Chavez Ave (looks like northwestern part of Pontiac Lakes area).

Candid feedback welcome!

[djmilf]

Just curious...who is providing you with this opportunity?

[PNWGuy]

a fellow coworker is in the real estate business, these are turn-key real estate rentals. I have his opinion of the area, I just need other opinions as well.

[djmilf]

I used to work in downtown Pontiac and used to travel up both Oakland Avenue and Baldwin Avenue to get to Orion Township. That was back in the 1980's and 1990's.

The neighborhood that your coworker is trying to sell to you is pretty much a slum. People who live there are on the very bottom of the economic ladder and can't afford to move anywhere else, poor blacks and Mexicans. I myself wouldn't venture off the main streets and into those neighborhoods - the local gangs might not take kindly to my presence. The houses are falling apart, the yards are turning back to wild fields and the streets are literally crumbling.

Pontiac itself is on the rocks. Its last auto factories closed down this decade. The local schools are atrocious. Its crime rate skyrocketed in the past several years. The city was placed in receivership back in Feb 2009 and an emergency financial manager was appointed by the state governor to try to straighten things out. The police department was disbanded due to lack of city funding and replaced with county deputy sherrifs.

To be frankly candid - a lot of people from outside Metro Detroit look at it as an investment opportunity due to the low prices and the perception that easy government Section 8 funding makes it a prime area for being a landlord. The reality is that being a slum lord in the depressed areas of Metro Detroit is a hard way to make a living and the only people who make the real money are those who can flip the homes as rental properties to "investors".

You describe the properties as 'turn key rentals'. If you're not willing/able to actually go to the neighborhood and look at the properties, then you're not informed enough to purchase them.

[PNWGuy]

Thanks djmilf. i'm no stranger to investing in properties site unseen and in areas typically known for slumlording - i've done that three times here in my area, and the ratio of rent to out-of-pocket-cash is much much higher compared to Pontiac. My existing tenants also live paycheck to paycheck, but they're good, honest, hard-working people that are just trying to get by at the moment, they pay their rent albeit late most of the time, and they appreciate me as a landlord (as far as i can tell!).

The only difference i can see here is that the areas I currently own have a chance to turn around. This would be the first time for me purchasing outside of WA state, and I'm just doing my due dilligence. On paper, the ROI is very very good, and of course it depends on how reliable the renter is, how long they stay, and how well kept the property is.

Yes, I know flippers make the most money, but I'm into long term, steady cash flow. $650/mo on $20K purchase price is about 25% annual return after expenses (taxes, vacancy, repairs, etc.). Again, that's on paper, and largely depends on the renter. BTW these are not section 8 renters.

And thank you for your feedback, I do appreciate it. Believe me, I understand all the risks involved