I could write a book on this. 1) SQUATTERS - Detroit is notorious for having squatters all over the city, even nice areas.

Finance is not real estate, screwing up in finance carries fines up to $100,000 and/or up to 10 years in federal prison, so you can see, it gets serious.I agree with Albert that your best approach is as a money partner in an LLC which keeps you out of the lending arena, at least as a lender taking a security interest in real estate.

The returns in these areas can be good, as you stated, but they can be notorious for tenant issues.

I've been told by one of my tenants that the city is where the criminals being released from California prisons end up.

Federal law, Dodd-Frank has requirements and restrictions with properties that have had new construction performed, 3. you'll need to find a mortgage broker to originate loans in compliance, not so easy.Not something to ignore as there can be very stiff penalties, up to $100,000 in fines and/or 10 years in a federal prison!

I'm too pretty for prison.

Some landlords are also using AirBnB as a way of taking back apartments from deadbeat tenants, who are notoriously hard to evict in New York.  

(Condos are notoriously difficult to consistently make money from as pure investments - largely because of the high service costs, and values being highly affected by the roller coaster economy).

The real estate fees will likely be fixed or only 3-4% with an foreclosure (banks are notoriously stingy in this regard), so your 19K is likely close.   

Trial court judges are notorious for arbitrary legal conclusions relying entirely on legal reasoning in briefs submitted by one of the parties.So here's the upshot - if you are willing to roll the dice and you have the money to defend an admin hearing and prepare at least one appeal, by all means carry through with the attitude that "the law is on your side."