But then i again i do understand that not being physically in the area and not having any knowledge regarding it can make it very tough.But all in all, i know it is not impossible to do as i am sure many other Canadians or even Americans must have or are doing similar things.

You also can't give an option beyond the term of your purchase agreement. " Do you mean to say that if I do a CFD, and then hand out a lease option to a tenant buyer, I must first fufil my CFD contract before the lease-option cean be exercised by the tenant buyer?

You are best to have an option contract  which gives the buyer the right to purchase at an agreed upon strike price (or an agreed upon mechanism for setting the strike price at the time of exercise) and a separate lease agreement (using the standard form of lease in many Provinces) at market rent.   

Detroit Metro taxes are fairly high (hire a tax appeals firm to lower them), insurance is higher than average in most places (call 10+ insurance providers to get quotes b/c the results vary quite a bit), and as you'll find through the forums, you must exercise extreme caution hiring property managers, contractors, etc (read many posts of investors getting ripped off).If done correctly, you can do very well.

Physically removing a person is not allowed as that is technically assault.

The small one needs physical work and the big one needs operational work.  

In the latter, there is far more room for growth in terms of physical space which helps keep property values down.

If it doesn't have any or much equity, you'd be wasting time and more than a dollar trying to buy a pile o' trouble.Go online or physically visit your recorders office and check for liens of record, like mortgages, judgments, back prop taxes or code enforcement. 

Exercise is the best medicine.

., may not make sense for you.However, if you can find an tenant / buyer interested willing to purchase the condo a little below market $375K; sell them the option to purchase and then (separately) rent it to them until they exercise the option, you might be able to mitigate your loses a little better than a strait sale and bringing 40K to the table.