Here's my 2 cents on Detroit (or maybe it's worth more). I am from Texas and several years ago I wanted to move away from the hot, dry summers and try to clear up allergies. After talking it over with other family members (I am single - so I didn't have to consider schools, etc.) they suggested Fannie Mae's Homepath and looking in Ohio (other family members living there), Indiana, and Michigan due to lower housing costs. I was TOTALLY confused when looking at housing prices in Detroit on Fannie Mae's website. I thought those prices might have been down payments or monthly mortgage payments. WRONG!
I put in an offer under the First Look program which was so absolutely ridiculous I expected to hear my Realtor laughing from 1,200 miles away. Instead, he called to congratulate me on my accepted offer. My offer of $600 for a 2 family 5/2/2 built in 1909 was accepted even with the conditions of all back taxes and water bill be paid. Fannie Mae spent $10,000 to sell me an entire house for what I was paying for a 1 bedroom apartment in DFW.
I packed up and moved to Detroit with plan to completely gut the house, insulate, new wiring, plumbing, etc. Here I was in my early 40's and had a mortgage free home. When I arrived, I found that employees from the cleaning company that were contracted by Fannie Mae had stolen the water heater, air conditioner, and the furnace. Neighbors had called the police - but they refused to respond.
I did A LOT of research as I started my remodeling. After all, there are many factors to consider when moving from a hot weather climate to cold weather.
Some of the bigger issues that I ran into are that EVERYONE is a plumber, electrician, painter, or whatever you're looking for at the time. You definitely need to get a lot of good referrals. Another issue is that Detroit is "Union" and you will either pay outrageous prices for the work or find a company from outside of the city willing to do the work. My first quote to have 2 water meter cutoff valves installed (one on each side of the meter in the basement) was over $500. I had already priced the valves at about $8 each at the big box stores. Thieve also watch carefully to see what you improvements you are making. I had an idiot trying to cut my LIVE 200 amp wiring that I had just had installed the previous day.
I think a lot of potential investors see the low housing prices and then their mind just starts seeing dollar signs. The year I spent in Detroit, I looked at 100's of other potential properties - some that were priced as low as $100. I even got into a bidding war on a 3,000 sq ft. house in a VERY nice neighborhood. The home across the street from it was on the market for $385,000. The house I was bidding on needed about $50,000 in repairs and sold for a whopping $2,000.
As a potential investor in Detroit properties - don't expect to pay low for move in ready. In my year there - I didn't see one property that didn't need SOMETHING to make it move in ready. At the very least you should budget for replacing multiple windows, electrical, HVAC, water heater, and plumbing (fixtures and lines). Many properties also will need a new roof. Siding is also popular among thieves - so don't be surprised when you find that needs to be replaced.
If you find some properties you are interested in as potential investments - due diligence is a necessity. I would recommend having someone trustworthy in the area that can physically go by the each property, take current pictures of the property AND neighborhood. Some shady sellers post old pictures of the property and you later find it has been vandalized or burned down. Also, check the Wayne County website for back property taxes and contact the Water Dept. to see if there are any delinquent water bills for the property (Wayne County will foreclose on a property for unpaid water bills).
I moved back to Texas after a year for family medical issues. Overall, I really liked the area. I was just cautious and attentive to my surroundings and didn't put myself in dangerous situations. I did pull up to check on a property one time and saw thieves breaking into the house next door...that's when you keep driving and mark that one off your list.
I could probably write a book based on just my year there. The bottom line in my opinion is that Detroit is a good potential for investors - but be the kind of investor that goes in and does a proper rehab and not just "put lipstick on a pig".
