Thirty-eight real estate markets have been tagged as “dangerous” for investors looking to make money on buying homes as rental properties in new quarterly data compiled by HomeVestors of America (known as the “We Buy Ugly Houses®” company) and Local Market Monitor.

The list categorizes markets according to different investor risk preferences and assigns a numerical score from minus-ten to plus-ten based on population, job growth, unemployment, home price changes, the market’s equilibrium home price (a proprietary measure of how much a market is over-priced or under-priced relative to local income) and the 12-month home price forecast.

“Despite the fact that home sales and home prices are increasing on average across the country, we are still seeing weaknesses in some markets,” said Ingo Winzer, president and founder of Local Market Monitor. “Sometimes weaknesses can signal opportunity for real estate investors, but not in the markets we ranked as ‘dangerous.’ In those markets, the risk far outweighs any opportunity.”

Leading the “dangerous” list is Battle Creek, Michigan, which drew a minus-four score because of its continuing job losses and weak home prices. Battle Creek is one of three Michigan cities-the others being Muskegon and Saginaw-that were ranked as “dangerous.” Only Florida had as many cities ranked as “dangerous” as Michigan. They are Port St. Lucie, Daytona Beach and Tallahassee.

The top ten “dangerous cities were, in order, Battle Creek, Salisbury (MD), Norwich (CT), Dalton (GA), Muskegon, Augusta, Decatur, Tuscaloosa, Dover and Port St. Lucie. The largest city to earn a “dangerous” label was Providence, Rhode Island, which ranks as number 26 on the “dangerous” list.

“All of the markets we ranked as dangerous have a combination of factors such as high-unemployment or weak job growth and falling or weak home prices,” said Winzer.