Michigan properties..500.00 to 3500.00 on ebay

95 Replies

So here's the 500.00 question, Michigan seems to have some serious issues right now. You can buy a 1400 square foot home in the murder capital of the world for right around 1000.00

Has anyone done this and made money? I'm thinking it's still a US state has police and a legal system. are there no renters willing to move into these homes. 

What is the occupancy rate like? If you were to drive down these streets are they totally abandoned, or will you see a home legally occupied every 3,6,9 houses?

I see these in Flint and Detroit. I know there has been an exodus of sorts, but it would be interesting to find out more info. It has to be safer than some South American countries or maybe not..

I would avoid investing in those types of homes unless you've got a LOT of money and your investing horizon is in the 15-20 year range. In many cases these homes are totally worthless. They're boarded up, water damaged, vandalized, and often they're part of a whole city block that's vacant. One thing you're not seeing from the list price is the amount of back taxes on these homes. The list price is going to be the cheapest thing to pay off with all the liens these properties have. For folks that have only a few thousand dollars to invest, $1,000 homes are an easy way to get you in a lot of trouble.

Don't even think about it.

Hey Dirk

Great question. I came out to the D back in 2006 from NY, made a bunch of money until 2009, when traditional financing dried up, which meant no exit strategy for what I was doing. I came back to NY and I am actually in Detroit currently ready to close on a property this week.

Certain areas are blighted, others are not. I am amazed at all the new developments that are going on here now. I love it. My suggestion to you is to fly out, drive around, talk to strangers, hook up with a realtor and do your due dilligence. Great potential in my opinion.

Good Luck

Exodus "of sorts?"

You're talking about a city with a housing stock built for a couple of million people, that now have a population of what, half a million?

A new roof on that $1000 house is still going to cost you $3000, just like it would on a $200,000 house in a decent suburb.  Water and sewer will cost, taxes will need to be paid.  What's the rent on a $1000 house?

That is interesting!

Two words = Back taxes.

I don't know whether to laugh or cry...I chose laugh because it is really funny.  The questions, and off hand comments, are really sad.  You know nothing of Michigan do you?  Michigan is a great state.  You may be surprised at the fact it has a police force, an actual legal system, and a surplus of renters.

You do realize that Michigan is not actually in Detroit, and that the suburbs are thriving? 

 Every comment here should be directed to Detroit, however it appears as though it is being directed at the entire state of Michigan.

Here's another fun fact. Many, Many, other REI's are bringing their cash here to invest because of the returns...oh, and because their investments are protected by one of those police stations with a courthouse...although the last time I checked, it did look like it might have been built before 2000.

Oh, and thanks @Account Closed  for your voice of sanity.

The question as I read it was have you bought a $1,000 house  in the murder capital and made money.

@Ron Drake  Last time I checked, I believe the murder capital of the world was somewhere in NJ now.  The quick answer is yes.

@Dirk Smithson  

  logic and common sense.... in any market were homes are sub 5k and there are homes in each and every big mid west rust belt city.. philly Baltimore, etc etc that are sub 5k.

However they are in the Ghetto's the worse of the worse.. only local slum lords could possibly make them work..

Its not just Detroit  ...

were you cannot buy homes for under 10k... is basically most of the west coast.. prime east coast.. new England type locations. But as I state and I have worked in over 20 markets you can find these homes virtually everywhere.

WE can find condo's in Vegas still for under 30k.. and I am sure other desert cities.

Flint and Detroit have some very blighted neighborhoods. There are people getting houses for nothing in those areas but it may not be worth it. One guy on the podcast suggested buying on the edge of a blighted neighborhood for flips.

I used to work construction in Detroit before the market fell out. If you're thinking about trying to make money there do your research. There are very bad areas and safety could be a big issue. 

On the other hand the rest of Michigan is pretty darn nice and lots of people are doing deals every day. If you just want cheap investments in Michigan look at the other bigger cities in the state. You won't find $500 houses but there's still money to be made.

@Joe Villeneuve  certainly wasn't talking about the whole state of Michigan. In fact color me green with envy on some of those deals you have posted. 

@Joe Villeneuve  

  there is a very upscale golf course in central Oregon called Pronghorn... its private.

Well you could buy lots there for zero... when prior to 07 they were 100 to 500k each.

Why zero because to transfer a lot the new owner must pay the transfer fee and join the golf club and that is 100k... So sellers just wanting to get out of their monthly dues were forced to go to zero and lots still did not sell.. I bet some people even paid to get out of them.

same thing in Wayne county the tax's water bills etc etc can just eat your lunch.. the properties really are not worth 500 they have negative values in my mind.

Certainly not trying to anger any Michiganians here:) Flint was named the murder capital when I started looking at Michigan Properties. I believe it was 2010. and was still that way in 2013 according to news reports.

In my experiecnce a roof wont cost quite as much on a 200k home vs. 500.00 home of the same size and here is my experience and logic.

1-On one of my properties I had a flooring instqller come right out and tell me he would be charging double for the job, if it was in a different area. 2- there are people that will do "filler work" jobs that dont need priority attention and can be done inbetween more important jobs just to keep a crew busy. 

After reading the posts I believe it is worth it to buy these properties. I may just fly out and take a gander. knowing the population is 1/2 million helps. Im sure its not what it used to be, but I know one thing. people like to make babies, those babies need homes! Detroit and Flint aren't below sealevel like New Orleans. It has to make a come back. 

I wasn't being sarcastic about the police force or justice system, I was simply stateing the obvious there is still one therefore there has to be infastructure. for lack of better word.. 

As long as water, electricity, gas and sewer are viable then its worth it to me. You dont hear of tornadoes, earthquakes floods in this area just a boom town for autos that went belly up and that happens to buisnesses all the time. then they rebound. I'm going to look into this some more thanks all for your input.

@Dirk Smithson  If you have any questions you can contact me directly.  I would be happy to answer them.  I'll give you the good, the bad and the ugly.

@Dirk Smithson  

@Ron Drake  

@Joe Villeneuve  

Joe does make a good point.  Depending on the investment strategy, money can be made everywhere, including Michigan, and likely, even in Detroit.  Though it doesn't work with my specific strategy, it's an error to assume that the entire state of Michigan doesn't offer at least some good locations to invest in.

I have a friend who flips over 100 properties per year in Detroit... and guess what? He does VERY well.

@Joe Villeneuve  

@Ron Drake  

Actually the murder capital is Modesto, California.

This was told to me by one of my law professors while I was in law school.  Modesto has the most per capita murders of anywhere in the U.S.

I stand correct...it's indeed Flint, Michigan (see below).

According to the FBI figures, Flint, Mich., had the highest murder rate of any sizeable U.S. city in 2012, the most recent year available. There were 62 murders per 100,000 population (which, coincidentally, was just about Flint's estimated population that year).

www.pewresearch.org/.../despite-recent-shootings-c....

  • Pew Research Center
  • Here is $1500 in D about 3 weeks ago. Shea picks them up now and then. It is kind of entertaining to see.

    Originally posted by @Jon Strishak:

    I stand correct...it's indeed Flint, Michigan (see below).

    According to the FBI figures, Flint, Mich., had the highest murder rate of any sizeable U.S. city in 2012, the most recent year available. There were 62 murders per 100,000 population (which, coincidentally, was just about Flint's estimated population that year).

    www.pewresearch.org/.../despite-recent-shootings-c....

  • Pew Research Center
  • In 2013 it was Detroit.  FBI crime stats.

    Originally posted by @Dirk Smithson :

    Certainly not trying to anger any Michiganians here:) Flint was named the murder capital when I started looking at Michigan Properties. I believe it was 2010. and was still that way in 2013 according to news reports.

    In my experiecnce a roof wont cost quite as much on a 200k home vs. 500.00 home of the same size and here is my experience and logic.

    1-On one of my properties I had a flooring instqller come right out and tell me he would be charging double for the job, if it was in a different area. 2- there are people that will do "filler work" jobs that dont need priority attention and can be done inbetween more important jobs just to keep a crew busy. 

    After reading the posts I believe it is worth it to buy these properties. I may just fly out and take a gander. knowing the population is 1/2 million helps. Im sure its not what it used to be, but I know one thing. people like to make babies, those babies need homes! Detroit and Flint aren't below sealevel like New Orleans. It has to make a come back. 

    I wasn't being sarcastic about the police force or justice system, I was simply stateing the obvious there is still one therefore there has to be infastructure. for lack of better word.. 

    As long as water, electricity, gas and sewer are viable then its worth it to me. You dont hear of tornadoes, earthquakes floods in this area just a boom town for autos that went belly up and that happens to buisnesses all the time. then they rebound. I'm going to look into this some more thanks all for your input.

    Tell you what.  If you fly out here.  I will give you the tour and you can see what type of property it is.

    Please explain to all of us how its going to be worth it.  Have you looked at the taxes in Detroit.  Do you even know that car insurance in Detroit cost more than the car note?

    There is no demand for these properties.  Why do you think they are giving them away.

    I know a deal right now in a burb just north of Detroit you can get a 3/1 for 35k that is already rented for over 800.  This is what @Joe Villeneuve  

    talk about all the time when out of town people want to invest in the city.

    I just don't get WHY would you when the burbs are spewing cash flow deals.

    WHY WHY WHY?

    Or are you one of those that are smarter than all of us types?

    No defiantly not smarter than anyone here in the forum thats why im here. I dont always listen to conventional wisdom or what they say in the news. I seek info first hand experience with my own eyes then decide. If you say taxes are high then that would be a deciding factor to not buy. Car insurance high, then property ins will be high too. I am trying to gather info to see all angles. 3/1 pulling 800 for 35k, good deal.. but a 3500.00 3/1 pulling 300.00 is a better deal as long as its free and clear and there are no outrageous tax bills. I like the idea of buying at the bottom, 

    I was in pheonix, made a 15k offer(bank approved it)on a reo, pulled my offer when I saw the pregnant lady buying crack on the corner, fear drove my decision that day. It is now selling at 115k

    I can't replace the front door to my house in Seattle for less than $5K....amazing "deals" elsewhere, I suppose. ;)

    Originally posted by @Dirk Smithson :

    So here's the 500.00 question, Michigan seems to have some serious issues right now. You can buy a 1400 square foot home in the murder capital of the world for right around 1000.00

    Has anyone done this and made money? I'm thinking it's still a US state has police and a legal system. are there no renters willing to move into these homes. 

    What is the occupancy rate like? If you were to drive down these streets are they totally abandoned, or will you see a home legally occupied every 3,6,9 houses?

    I see these in Flint and Detroit. I know there has been an exodus of sorts, but it would be interesting to find out more info. It has to be safer than some South American countries or maybe not..

    You might want to visit those cities to get a better sense of what's going on, see for yourself, imo.

    Kudos,

    Mary

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