Investigators are looking to the public for information about the death, which happened on Charles Street near Michigan Avenue and Harris.
The 71-year-old homeowner was found dead on his floor. Police say the man had been fatally wounded by someone using a cutting instrument. The man lived alone.
The Michigan State Police Crime Lab were working late into the night, still at the scene after 10 p.m. inside the house.
Neighbor Barb Bassett was out with her dog Molly, on their morning walk when she found a lost wallet at about 10 a.m.
"I found his wallet," she said. "When I looked at it, I realized it was just down the street. So I wanted to give it back to him."
The address on the drivers license came back to her neighbor's house on Charles, a couple of blocks from Bassett's place. She went to the door to return the wallet.
"Rather than just leave it when he didn't answer, I knew the next door neighbor knew him well," Bassett said. "I went and asked her to call him. Instead she tried to knock again and found the door was unlocked.
"Rather than go in with the wallet, his car was there ... and we decided to call the police."
The 911 call came in at 10 a.m. and by 11:15 in the morning, a man was taken into custody at Prospect Park behind the victim's house but that individual had possible mental issues and it was unknown if the arrest was connected to the murder.
Neighbors say they frequently saw the victim especially in nice weather.
"He used to just sit outside in the driveway in a lawn chair," said one neighbor.
"It's very sad, shocking," Bassett said. "It's a nice neighborhood."
If anyone has any information, call the Ypsilanti Police Department at 734-483-9510.