A Detroit land rush is under way that draws investors from around the U.S. and as far as England, Cambodia, China and Australia to snap up distressed homes for as little as $500. Local buyers -- and even a Dutch mink farmer -- scooped up hundreds of houses at Wayne County’s tax auctions, which last year put a record 21,350 tax-delinquent properties up for sale, 89 percent of them in Detroit, and sold 12,333.
Chris Christoff of Bloomberg reports that private-equity firms such as Blackstone Group LP are snapping up foreclosed homes in California, Arizona and Florida. Smaller investors also have found bargain-basement bonanzas in Detroit.
In a city bedeviled by crime, population loss and fiscal distress, buyers are betting on an urban renaissance like those in Washington; Brooklyn, New York; and Pittsburgh, Pennsylvania, and property values are rising.
Peter Grosso of Long Island, New York, paid about $90,000 for 29 Detroit homes at an auction for tax-delinquent properties last October. He’s sure they’ll sell at a profit within 10 years, while he rents them for income.
“There’s going to be a big turnaround for Detroit and I want to be part of it,” says Grosso, 32.
