My comments in red.

Quote Originally Posted by davewindsor View Post
Insurance at $4,500 for a building with knob and tube wiring [[being that it's built in 1890s) or as a rental sounds correct.

I pay $800 for a similar rental house, albeit not in Detroit.

What really scares me about this property is "buyer Pays For City Inspec Upon Seller Offer Acceptance."

Why a city inspector? Why not a private home inspector? I believe it's a hoop the CoD makes you jump through. It's not the same kind of inspection as the kind an ASHI certified inspector does pre-purchase. Does it need an occupancy certificate to get the utilities turned back on so you can live in it? Do I need to hire licensed tradespeople now to do the work? I can see the cost for repairs being a lot higher than $25K once a city inspector goes through it and makes his assessment.

As for rents, are you talking about Section 8 housing vouchers because I doubt you'd get $1,000 a month all cash for a place close to Mexicantown. And, do you really want to deal with Section 8 tenants?

With foreclosures, you're dealing with quit claim deeds. No, warranty deeds. That's the advantage of buying from the bank versus buying a pre-foreclosure. The bank cleans up the deed, buys title insurance, pays old taxes and utilites. How much is it gonna cost you to fix up your title if you want to sell it? And, do you want to deal with the headaches involved with quit claim deeds?

What also bothers me is the house sold for $100,000 in 2006. Half a year ago, someone buys it for $15,000 and now it's listing for 10% of that amount. Why would someone walk away from $13,000 instead of trying to sell it privately? Maybe he did buy with the intent of trying to flip it after going to one of these $2,000 Robert Allen get rich quick real estate seminars at Cobo Hall and couldn't and realized it was better to just give it back to the bank. Why didn't the guy who had it for half a year try to rent it out for $1,000? It makes no sense. People don't just walk away from properties after 6 months over $15K unless he discovered something serious and costly. He may have even stripped the copper plumbing, toilets, fixtures, kitchen cabinets and anything else that's saleable to try to recover his loss after deciding to walk away. Whoever buys it is probably going to be giving it back to the city for back taxes so they can demo it. I realize that it might be interesting to learn about real estate. But, if you want to learn the hard way, be my guest. I don't want to be a cynic, but I've seen so much garbage circulating around that I can't think otherwise. I'll bet the listing agent won't even let you do a walk through prior to firming up your offer because of "safety" issues or I don't have the keys because the vendor never gave them back or the doors are nailed shut.

There's no shortage of cheap, cheap, cheap houses for sale in Detroit. The super low price doesn't have to mean there's some out-of-the-ordinary set of issues you'd have to deal with. It's just another bank-owned house in Detroit. Yes, it's probably not intact. Few are. Welcome to Detroit real estate investing.