(Bloomberg) 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.
Grosso is part of a Detroit land rush that’s drawn investors from around the U.S. and as far away as England, Cambodia, China and Australia seeking 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.
“There’s going to be a big turnaround for Detroit and I want to be part of it,” said Grosso, 32, who left a job at Citi Field stadium after he was injured in a fall while erecting a rooftop sun screen. He said he paid as little as $600 for his Detroit homes and has driven from Long Island several times to check on them.
While private-equity firms such as Blackstone Group LP (BX) snap up foreclosed homes in California, Arizona and Florida, smaller investors 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.