News & Blogs Detroit auctions historic homes for $1,000 (1 Viewer)

Matt Derrick

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Found this on: https://roadtrippers.com/blog/help-save-a-city-by-buying-a-historic-home-for-only-1-dollars-000

Help save a city by buying a historic home for only $1,000

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18 April, 2014 Tatiana
Do you have $1,000 burning a hole in your wallet? Are you in the market for a historic home? Well, Detroit is practically giving homes away. And many of these homes are simply beautiful. But, there's a small catch.

Huffington Post reports that Detroit Land Bank Authority is auctioning off beautiful, historic homes for as little as $1,000. Mayor Mike Duggan is attempting to rehabilitate the East English Village, a neighborhood in Detroit's East Side. The catch: Winning bidders must bring their homes up to code within 6 months and then live in the house. The auction is one-day only.

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Obviously some of the houses need a little TLC, but for the most part, they're an incredible investment. Detroit may be bankrupt, but it's a great city. I visited last year and I was incredibly impressed with it. There are historic neighborhods with stately homes and massive abandoned buildings, all historic, all looking for a little love. And the people are amazing. Maybe I just had a particularly positive experience, but I could see myself calling Detroit home one day.

According to Huffington Post:

Almost every listing in the auction looks like a steal for a grand, at least from the outside. But Building Detroit is up-front about possible costs new owners might incur, and some houses need extensive repairs. The new auction will also have open houses for the properties on April 27, unlike the summer auction, in which houses must be bought without knowing what's inside (or what's been stripped by scrappers).

Building Detroit is restricted to Michigan residents, companies and organizations who have not already lost a property due to back taxes in Wayne County in the last three years. These requirements seem aimed at eliminating out-of-state speculators whoscoop up houses and then don't take care of them, a problem that sometimes occurs with properties in the county's annual tax auction. It also might dissuade less serious buyers -- some have purchased homes in the tax auction, only to abandon them once they see the high costs for renovation or steep property tax bills.

Prices for other homes in the neighborhood (not included in the auction) are selling for 15-100 times more.

Winning bidders won't just hand over a check and walk away; the city requires new owners to sign contracts agreeing to bring properties up to code and occupy them within six months of purchase or risk forfeiting the property. The Land Bank may extend the six-month deadline on a case-by-case basis for owners who have made significant progress on renovations.

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DuHastMich

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I'd been researching this same thing, Matt.

Things that suck about the balderdash of cheap homes in Detroit:

1. 95% of them will cost 10 - 20 times your investment to bring up to code - many which have been stripped of their copper/water heaters to suppress whatever habits locals need to feed.

2. Many of these are in districts where squatting isn't advised (let alone living in them), although I'd mulled over buying one I found (a home with two apartments) for $775

3. These glorious bastards (namely, the mayor) fail to mention the closing costs involved and the taxes per annum/quarter

4. Average wait time for 911 call? 58 minutes.

I talked with a realtor about the overall costs of buying one. I'm waiting for his figures, but $550 for the house + closing costs + inspection fees + investment involved with bringing the places up to code MAY be worth it if like two people go in on one house (maybe zone a few as businesses and launch some hostels?)
 

DuHastMich

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Oh damn...forgot the major one...

5. Must be a Michigan resident to purchase the auction listings from the city's rebuilding site. RE/Max and other listings are a F.F.A.
 
K

Kim Chee

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Oh damn...forgot the major one...

5. Must be a Michigan resident to purchase the auction listings from the city's rebuilding site. RE/Max and other listings are a F.F.A.
Without looking into what is required to prove residency, I'd consider this the easy part.
 

DuHastMich

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Could've sworn I read somewhere that it's general consensus anyone getting mail at an address for longer than 30 (maybe 90) days can claim residency in a given area.

But again, this is Michigan. Not saying they're any different, but anyone (or thing) capable of bankrupting a city of automotive industry and deep musical history has me concerned the reasons are more than meets the eye in terms of politics and law...
 

Traveler

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Could've sworn I read somewhere that it's general consensus anyone getting mail at an address for longer than 30 (maybe 90) days can claim residency in a given area.

But again, this is Michigan. Not saying they're any different, but anyone (or thing) capable of bankrupting a city of automotive industry and deep musical history has me concerned the reasons are more than meets the eye in terms of politics and law...
If you file a change of address form with the USPS they send a confirmation letter so you have proof of address. Usually comes with a 10% off coupon for Lowes too :)
 

DuHastMich

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Lowes? Brilliant!! :)

Thought about buying a house, dumpster diving for spare materials in neighboring cities, then making a hostel or some form of safe squat house. The idea is getting more and more tempting - unfortunately, I lack much carpentry knowledge. I can visualize, and can swing a hammer...so I'd need able bodied individuals willing to assist.

I'll probably mull it over...get drunk on the idea...then see what happens.
 

dprogram

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Reminds me of Memphis. ;) When I was a RE agent I sold quite a few homes for under $3000. Most were in what a middle class person would call "undesirable" neighborhoods but really not too horrible. New paint and flooring can do wonders. If you got a 203k loan you could have the cost for major repairs fronted to you in increments. There's also a grant I recently read about for $5000 to help with closing costs and any repairs that need to be made to fulfill loan requirements.
 

DuHastMich

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Believe me, if I can find an urban development grant or some type of credit/help making a property sustainable, I'll buy 12 of these houses and get all closing costs covered (I'd pray), then use them all for free squats, shelters, or safe havens for individuals.

Detroit won't stay down forever - eventually, either current or next Prez will send an armada of assistance up there to revive the Motor City.
 
A

Arapala

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Right in, im from Michigan and i can say if your in our dirty kid community Detroit is a badass place to be!!
 

dprogram

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Believe me, if I can find an urban development grant or some type of credit/help making a property sustainable, I'll buy 12 of these houses and get all closing costs covered (I'd pray), then use them all for free squats, shelters, or safe havens for individuals.

Detroit won't stay down forever - eventually, either current or next Prez will send an armada of assistance up there to revive the Motor City.

Check this out then - http://www.mlive.com/business/detroit/index.ssf/2014/02/20000_home_improvement_grants.html

This is cool too - http://www.rurdev.usda.gov/RD_Grants.html
 

DuHastMich

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would anyone wanna go in on one of these houses? if the location and structure seem right then i might would be.
Absolutely would. I have my sights on an apartment unit currently going for $550 and several others around $700. Closing costs? Not sure...usually run an 'x' percentage of final sale, but many are pushing $500-750 for closing. Inspection is a couple hundred more - HOWEVER, the grant link you gave me would immediately apply to us when the deed passed through the title company and into our hands.

I'd put the greatest portion on the outside, and only make sure the structural integrity is good on the inside. We'd really need a potable water supply, good toilet and perhaps water heater (since many have been stripped out of abandoned homes).

If offered a second round of grants, I'd like to entertain geothermal and good roofing material. The final out-of-pocket cost that would be smart (although optional) is security unit - which I'd assume 2-3 cane corsos would do the trick.
 

Rob Nothing

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Would totally be into this if there was backup. Not been around much, but the last article about bro buying a house there for 500 blew me away.

"I think that's the shit, man"

But as far as going it alone, I've definitely got a few more years to put behind me before committing to it solo.
 
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DuHastMich

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I'm definitely down - maybe make 2 or 3 squats and one or two hostels. Only reservation I have is the fact we'll be handing out Mini-14's to everyone that stayed there.

Of course, an idea like this doesn't have to be restricted to Detroit...many other cities have abandoned homes which I'm sure people would let go for cheap - some have unpaid tax liens, too. One of my old neighbor's house sold for $3300 to recover taxes - it was a 4 bedroom.

Again, I do like the Detroit idea for the fact it doesn't take much to bring the homes up to code - nor will Detroit's apparently lackadaisical economy stay down forever...
 

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