Yeah, Detroit. Been here on and off for 5 years and still a neophyte!
The areas are 'hyper-local' - perhaps similar to many big NE American cities, you can have big expensive houses in nice neighborhoods, right next to burned out wastelands that run block after block...
yes you can get 25k houses that rent 700. But beware that base assumption. 25k. Sure, but an HVAC system that goes, a busted pipe, vacancy that is then gotten into by scrappers (the scurge of Detroit, parasites that will rip a house naked through 5k of dry wall to get a pound of copper. They'll even rip out copper from connected pipes and let the place flood. And make a note to come back after youve fixed it..) Risk. On a standard suburban midwest foreclosure you might have 20% repair costs. With these properties it could be 200%. Putting new dry wall and paint on a 25k house is just as costly as on a 150k house, but is a bit more impactful on equity.
the local investors aren't dumb. And remember metro Detroit (including suburbs) is 6 million people +. Detroit proper is only 650k population. FYI, there are a lot of investors here already!
And it seems there is a nice side gig fleecing out of town investors!
I'm not saying there are not such deals around - I'm trying to land a few myself - but ...common sense. If it's on mls and has numbers like that, there will be issues. Because as others have pointed out, if it was that good a deal, you think they need to find people in SoCal to get someone with money?
Also, is it on a 'quit claim' title? Check the small print. You could be looking at 1k to 5 k+ to get a real free and clear title. You can buy the house and then be hit with liens and stuff you didnt know was there.
So, caveat emptor.