310 Homes Bought for 2M - $6.5k/Home

13 Replies

I don't know how else to sum this up but was blown away when I just saw this 10 minute Vice - report on how Detroit is a heaven for investors buying off owner-occupied homes who fail to pay city-county taxes. Wayne county penalizes these residents and VOILA - its a heaven for investors scooping up entire neighborhoods for pennies. 

Still don't believe me? Watch below.

www.youtube.com/watch?v=gHLaWw_PnQY

A quick realtor.com check doesn't show me much of these but i am sure folks on BP here would have bought from the state-auction website - anyone in here can please shed some light on how to go about scooping such cheap hell of a deal(s) through state auction websites?

Other than having the cash-reserves ready and battling it out in the auction, what else is required?

once a year Wayne county has an online auction . Costs $2500 to register I believe , this money is refunded if you don't bid or win any bids . If you do win it is credited toward the amount of the property . 

Registration starts every September and the bidding starts in ocotober. The good thing about the auction is you are given free and clear title . Obviously a lot of junk in the auction. Mostly D class property . 

Visit the wayne county treasurer website for more info 

Originally posted by @Varun Parkash :

I don't know how else to sum this up but was blown away when I just saw this 10 minute Vice - report on how Detroit is a heaven for investors buying off owner-occupied homes who fail to pay city-county taxes. Wayne county penalizes these residents and VOILA - its a heaven for investors scooping up entire neighborhoods for pennies. 

Still don't believe me? Watch below.

www.youtube.com/watch?v=gHLaWw_PnQY

A quick realtor.com check doesn't show me much of these but i am sure folks on BP here would have bought from the state-auction website - anyone in here can please shed some light on how to go about scooping such cheap hell of a deal(s) through state auction websites?

Other than having the cash-reserves ready and battling it out in the auction, what else is required?

 During the recession, there were some good properties in the auction. Now it's almost all garbage property. They do a lot of advertisers for the auction, so there is a lot of competition. I don't even bother looking anymore.

Hopefully they don't set fire to the place on their way out.

Originally posted by @Joshua Birk :
Originally posted by @Varun Parkash:

I don't know how else to sum this up but was blown away when I just saw this 10 minute Vice - report on how Detroit is a heaven for investors buying off owner-occupied homes who fail to pay city-county taxes. Wayne county penalizes these residents and VOILA - its a heaven for investors scooping up entire neighborhoods for pennies. 

Still don't believe me? Watch below.

www.youtube.com/watch?v=gHLaWw_PnQY

A quick realtor.com check doesn't show me much of these but i am sure folks on BP here would have bought from the state-auction website - anyone in here can please shed some light on how to go about scooping such cheap hell of a deal(s) through state auction websites?

Other than having the cash-reserves ready and battling it out in the auction, what else is required?

 During the recession, there were some good properties in the auction. Now it's almost all garbage property. They do a lot of advertisers for the auction, so there is a lot of competition. I don't even bother looking anymore.

 Alright, it seems the Detroit boat has sailed as well for me then. 

These are garbage properties. You can buy them for $3,000 cash if you wanted to.

I owned 19 at one point.

Originally posted by @Saj S. :

These are garbage properties. You can buy them for $3,000 cash if you wanted to.

I owned 19 at one point.

 Oh Man, what did you end up doing with them? The video showed owner-occupied decent properties sold for 5k and less, but it seems those days are long gone and just junk is left. The irony is how one guy scooped up 310 homes for a jaw-dropping bargain of 2M. If the city now never relapsed back to progress, he is in a serious hole for many years to come but it seems unlikely.

@Varun Parkash In 2011 I was able to sell most for around $9k each. Overall I broke even, but I was lucky to walk away unscathed. I wrote off real estate but re-entered in 2014, investing locally. And it was a great decision! 

So the guy spent 2 million and bought 310 houses . Now he has to get insurance , depending on the houses , lead paint inspections , pay fines for code violations , secure vacant properties . Seems to me he could have bought 10 million in liability 

@Varun Parkash Thanks for sharing; however, I won't say this is heaven for investors. 

Anyone who has listened to the BP Podcast knows how Josh feels about Detroit and for good reason lol! *only joking*

Originally posted by @Saj S. :

@Varun Parkash In 2011 I was able to sell most for around $9k each. Overall I broke even, but I was lucky to walk away unscathed. I wrote off real estate but re-entered in 2014, investing locally. And it was a great decision! 

 Oh, Glad Saj that you were able to make it even in the worst case. I currently own out-of-state properties Class A in prime-neighborhoods only - but since they are all brand-new, been lucky so far. 

Originally posted by @Matthew Paul :

So the guy spent 2 million and bought 310 houses . Now he has to get insurance , depending on the houses , lead paint inspections , pay fines for code violations , secure vacant properties . Seems to me he could have bought 10 million in liability 

He is not a one-man army, most of his portfolio might be a steal considering it already has people living in them and he is just building mad-crazy wealth and of course with any investment, risks are involved for which he will have his plans since he is local.  

Biggest Joke is: imagine a scenario as they show it in the video too: $500 per month * 12 = $6000 earned in rent in one year = property paid for itself and now every penny he earns on it is pure profit - no loans/no games/no drama. The occasional risk of a bad tenant, crime neighborhood, trashed property will always be there. But in 3-4 years, he will have earned back his 2M easily as all the properties will pay for themselves and then all he is liable is for standard tax costs and whatever standard repairs/maintenance that any landlord has to do on an old home. Not everything is golden for him, but still considering the time - when he would have bought them at rock-bottom-laughable prices - he has strong chances to win in the long run.

There is money to be made in the auction if you really know the areas, but it is tough. I have bid on property for the past 3 years in the auction and lost to people who have wayyy over paid. Often times there are better deals on the MLS.

Those cheap junk houses in bad areas are Liabilities. Who wants it? They are better demolished and turned into a farm, which at least will reduce maintenance cost, property tax, and generate some food.

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