We have considerable equity (about $350k) since we bought before the big upswing. 

I'm a newbie, so what am I not taking into consideration?

Another idea would be to look at large houses in Clifton Heights to rent to students.

The tenants will have to deal with turning the hot water on and off at the water heater (I assume from your post) as well as the considerable dust and inconvenience of having the concrete floor of there home ripped up for two weeks.

(Consult an attorney for the gory details) Look into Umbrella insurance instead, until you have considerable equity.

For me, the extra $2k does hurt my pride a little, but after a lot of consideration, I realized that it was worth far more to me to swallow that pride and dive on in into investing, than it was to stick to my guns and go into a potentially long and drawn out fight. 

There are several things you need to take into consideration. 

Note that you won't find a 120k house in several of the cities (no houses that cheap in RO, Berkley, etc), but the numbers work for a tax comparison.Hazel Park: $5627Clawson: 4219Royal Oak: $3467Madison Heights (Lamphere Schools): $3748Madison Heights (Madison Schools) -- lesser area of madison heights with LOWER homestead taxes. 

All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved.So i looked up the statute which i posted above and it seems that the legality can really depend on how a person is perceiving the the property that is being wholesaled.

Very generally, 7-8 sq. ft. per person is a national average so if there's less than that you are likely in good shape (NOTE THAT THIS is a Generality, some markets support less storage and others considerably more).