If you’ve searched YouTube for real estate investing advice, you’ve likely seen the “gurus.” They pull up a spreadsheet, plug in a few numbers, and claim a 20% cash-on-cash return as if the math is rent minus mortgage.
That’s not how real real estate works—especially not in Detroit multifamily investing.
My wife and I own a 56-unit apartment complex in the Detroit metropolitan area with no syndications, no partners, and no outside investors. We just received our October P&L statement, and today I’m breaking down the actual numbers so you can see the difference between a proforma projection and real-world operations.
Gross Income vs. Real Cash Flow
For October, our gross rental income was $61,500. That’s strong—especially considering the building brought in only $46,000 when we bought it.
But influencers often skip the real story. Cash flow is NOT just rent minus mortgage.
Here’s the truth.
October Expenses (The Part Gurus Skip)
Here’s what actually came out of that $61,500:
- Utilities: $5,500
- Insurance: $1,500 (part of a commercial bundle we use across our Michigan properties)
- Property Management: $3,125 — we hire in-house, not third-party
- Maintenance Tech: $2,500 — full-time, shared across properties
- Repairs & Maintenance Supplies: $1,500
When all was said and done, our gross profit for the month was:
⭐ $15,375 ⭐
Better than the “guru math,” but not the fantasy numbers people expect.
The Trap Most Investors Fall Into: Cash Flow Is Variable
If you annualize $15,375/month, the building looks like it generates $184,500/year.
It looks amazing…
Until reality shows up.
Real-world examples from our portfolio:
- A boiler broke at one of our 100-unit properties: $15,000 gone instantly.
- We replaced the roof on this 56-unit: $200,000.
- Evictions, vacancies, legal fees, marketing, snow removal in Michigan winters—these hit the bottom line fast.
One bad month can wipe out what looked like an “amazing” annualized cash flow on paper.
This is why I teach students and investors in Detroit:
Cash flow is a bonus, not a salary.
Why I Don’t Quit My Job—Even With 377 Units
People often come to me and say, “Tony, why don’t you just retire and live off your rents?”
Because that’s a dangerous move.I never want to choose between replacing a broken boiler or feeding my family.
We treat this as a business. We use our active income from other businesses to live, and we let the real estate compound. While the monthly cash flow is great, the real wealth comes from:
1. Tax Benefits
We took a $1 million cost segregation deduction on this building alone.
2. Appreciation
We bought the property for just under $5M. Based on today’s NOI, I’m confident it’s worth around $7.5M.
3. Refinancing
When we refi, we expect to pull out all of our original capital — achieving an infinite ROI. That’s real wealth creation—not relying on monthly rent checks.
The Bottom Line: Multifamily Is the Greatest Wealth Vehicle—If You Treat It Like a Business
If you want to succeed in Detroit multifamily real estate, here’s the truth:
- Don’t trust the gurus showing you spreadsheets—ask to see their P&L statements
- Consider bringing management in-house as you scale. Always look at the P&L, not the pro forma.
- Never rely solely on cash flow to survive.
- Use your active income to live; let real estate compound in the background.
That’s how you build long-term, low-stress wealth.
And if you want to go deeper into how we operate our buildings, check out my book: The Small Multifamily BURR Method, or apply for coaching with me.
