{"id":170146,"date":"2024-04-03T10:45:12","date_gmt":"2024-04-03T16:45:12","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=170146"},"modified":"2024-04-20T08:26:06","modified_gmt":"2024-04-20T14:26:06","slug":"baltimore-sells-abandoned-homes-for-one-dollar","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/baltimore-sells-abandoned-homes-for-one-dollar","title":{"rendered":"You Can Buy a Property for $1 in Baltimore\u2014Here\u2019s How"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC5262185517\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">HBO&#8217;s seminal series&nbsp;<\/span><em><span data-preserver-spaces=\"true\">The Wire&nbsp;<\/span><\/em><span data-preserver-spaces=\"true\">put Baltimore&#8217;s plight on the map, with crime and urban blight running amok. Now, 16 years after that show ended, it seems little has changed from the city it depicted. The situation has become so desperate that the city is selling off dilapidated buildings for f $1. However, before you dig out the loose change in your pocket to snag a townhouse, remember there are caveats.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">There were almost 15,000 abandoned homes in Baltimore as of 2022, blighting the landscape, and Mayor Brandon Scott\u2014as first reported in&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-03-20\/baltimore-wants-to-sell-hundreds-of-vacant-homes-for-1-each?embedded-checkout=true\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Bloomberg<\/span><\/a><span data-preserver-spaces=\"true\">\u2014is offering up 200 of them virtually free to encourage investors to help transform the beleaguered city. It echoes an initiative that helped change&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.governing.com\/community\/once-again-baltimore-hopes-to-fight-blight-with-1-homes\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Baltimore in the 1970s<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The city is keen to foster homeownership, so owner-occupants get the $1 price. For investors, that number goes up to $3,000. Savvy buyers could, of course, live in the home initially and move out and rent later, thus still qualifying for the free home along with grants of $50,000 to assist with renovations, provided recipients secure preapproval for construction loans.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Should You Invest in Baltimore?<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">So, should you kick-start your investing journey by buying one? To answer that, you need to answer another question: Do you mind putting in a lot of work and money to fix up a home in a crime-infested neighborhood in which you will have to live?<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Before responding, it&#8217;s worth noting that New York instilled a similar scheme in the 1970s and \u201980s in Harlem, where it&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/1981\/07\/24\/nyregion\/city-to-sell-harlem-brownstones-by-lottery.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">auctioned off brownstones<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;for bargain-basement prices. Those homes are now worth millions.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">However, Baltimore is not New York, and a lengthy wait may never result in millions of dollars in equity. That said, a developer could ostensibly buy multiple homes to transform entire neighborhoods for the better. For most small investors, however, if money is tight, you are unfamiliar with gut job renovations, and are not keen on living in a war zone, the logical advice would be to run in the opposite direction\u2014quickly.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The U.S. Has a History of Selling $1 Homes.<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Baltimore is just one of many cities in America selling rundown homes for $1.&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnbc.com\/2024\/01\/30\/newark-new-jersey-first-lottery-one-dollar-homes.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Newark<\/span><\/a><span data-preserver-spaces=\"true\">, New Jersey, a 20-minute train ride from Wall Street, recently implemented a similar program, and HUD has&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.hud.gov\/program_offices\/housing\/sfh\/reo\/goodn\/dhmabout\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">an entire website<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;dedicated to $1 homes.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">A city-sanctioned sale is a safe bet that once all the criteria are met, you can buy a home for $1 and probably be eligible for loans and grants, too. However, beware of homes advertised for sale for $1 elsewhere. The magical sales price could be misleading.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">A luxury New York condo was recently advertised for sale at that price and eventually auctioned for&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.crainsnewyork.com\/real-estate\/plaza-hotel-luxury-condo-listed-1-dollar-sell-auction-wednesday-jan-2\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$2.5 million<\/span><\/a><span data-preserver-spaces=\"true\">. Bait-and-switch tactics are common with unbelievably low-priced homes.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">And $1 homes are not limited to the U.S. either. Italy has recently&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.independent.co.uk\/travel\/europe\/italy\/italy-one-euro-homes-buy-house-b2470838.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">been in the news<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;for selling rundown one-euro homes in picturesque villages, as have&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.thetravel.com\/travel-destinations-homes-for-one-dollar\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">many other cities<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;around the world.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Who Should Invest in $1 Homes?<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Despite the negative aspects of investing in a $1 home, there are instances when it could be worthwhile. There is a chronic shortage of&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/institutional-investors-are-buying-affordable-housing-in-droves\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">affordable housing<\/span><\/a><span data-preserver-spaces=\"true\">; many urban cities are nearing bankruptcy. Thus, cities are desperate to increase their tax rolls and could help out with&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.klfy.com\/local\/evangeline-parish\/blighted-property-being-turned-into-new-affordable-housing\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">subsidies<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;from state and federal governments and profit and nonprofit organizations.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">To start the process, check the HUD website for $1 homes near you, and then look to see which&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.hud.gov\/program_offices\/comm_planning\/cdbg\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Community Development Block Grants<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;(CDBG) are available. However, don&#8217;t consider taking the plunge unless:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">You are extremely handy and can do much of the work yourself.<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;If you are handy and don&#8217;t mind taking on the general contractor duties of a major renovation, hiring subs along the way, you can maximize government grants,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.naca.com\/city-one-dollar-homeownership-program\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">programs<\/span><\/a><span data-preserver-spaces=\"true\">, and loans to bring in the renovation without too much money out of pocket.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">You are an experienced investor with a tight-knit construction crew.<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;If you&#8217;re an investor looking to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/guides\/how-to-flip-houses\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">flip<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;or rent multiple homes when finished, the economies of scale could work in your favor. Granted, you won&#8217;t be able to pick up the properties for a dollar, but by having efficient crews go from home to home, you can minimize costs and help uplift an entire city block, raising property prices. Beware, however, of the perils of doing construction in a blighted community. Homes are being sold for a dollar for a reason. Ensure your crews are protected and secure, all entrances locked, and never leave your tools on the premises.<\/span><\/li>\n\n\n\n<li><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2022\/06\/08\/business\/diversity-developers-real-estate.html\" target=\"_blank\" rel=\"noopener\"><strong><span data-preserver-spaces=\"true\">You are a minority developer<\/span><\/strong><\/a><strong><span data-preserver-spaces=\"true\">&nbsp;and can access funds designated for diversity and inclusion.<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;Over the last four years, many cities and&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2021\/03\/17\/business\/to-help-black-developers-programs-start-with-access-to-capital.html?pgtype=Article&amp;action=click&amp;module=RelatedLinks\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">banks<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;have been keen to redress gender and racial inequality in construction and lending and have earmarked programs and money for minority-led projects in historically&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bloomberg.com\/news\/features\/2021-06-24\/can-a-demolished-black-neighborhood-build-back-better?embedded-checkout=true\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Black neighborhoods<\/span><\/a><span data-preserver-spaces=\"true\">. Of course, that doesn&#8217;t mean that everyone hired to work has to be a minority. Often, minority developers can access the money and partner with a nonminority contractor or business associate.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Seeing homes advertised for $1 anywhere in the U.S., especially in and around major cities, will attract attention. Cheap homes that require an entire gut rehab are rarely deals, especially if the land is not valuable. That&#8217;s because the money you need to spend to make them livable usually equals the amount it costs to buy an&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.youtube.com\/watch?v=g2ms5rPwJK8\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">already livable home<\/span><\/a><span data-preserver-spaces=\"true\">\u2014without the headache of construction.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The only way to get ahead in the short term is to save on construction costs by doing much of the work yourself\u2014trading your time for money\u2014or by accessing grants or deficient interest-rate loans. So, they are generally not for short-term flips unless the aforementioned factors are in place. Instead, these are best for long-term buy-and-hold owner-occupants investing in their futures and the increasing prosperity of the neighborhood.<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_9aaef8ccc49a9ba372ace5574d2a26ba\" class=\"visibility-group  hidden\">\n        \n\n<div id=\"hero-block_666d58e5bf4f32cd53dd973ef578baf5\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-theme-gold-color has-text-color has-large-font-size wp-block-paragraph\" style=\"font-style:normal;font-weight:800\">Get the Best Loan Today<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color wp-block-paragraph\" style=\"font-size:16px\">Find trusted, <em><strong>investor-friendly<\/strong><\/em> lenders who specialize in your strategy. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<div id=button-custom-event-block_1b416c54844cd2d24b69cf8a33258043 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/business\/finder\/lenders\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Lender Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/baltimore-sells-abandoned-homes-for-one-dollar&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-gold-background-color has-text-color has-white-color\" target=\"_blank\">Find a Lender<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Marketplace-Blog-Blocks-Lender-v3.png\" alt=\"investor friendly lender, investor friendly real estate loans\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color wp-block-paragraph\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/baltimore-sells-abandoned-homes-for-one-dollar&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Abandoned homes have become a problem in some of America&#8217;s largest cities. Baltimore has come up with an interesting solution by selling off these properties for $1. What&#8217;s the catch? <\/p>\n","protected":false},"author":613725,"featured_media":170149,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8,7119],"tags":[],"class_list":["post-170146","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/170146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613725"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=170146"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/170146\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/170149"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=170146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=170146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=170146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}