Experience with Wayne County (Detroit) Tax auction?
Investor · Grosse Pointe Park, MI · Member since 2015 · 164 posts · 64 votes
Does anybody here have any experience with the Wayne county(Detroit) tax auction? There are several properties that I am very interested in. I know that March 31st is the deadline for having payment (or a payment plan) in place. Does this mean that if this has not been taken care of before the 31st that the property is likely to go to auction? How long before the auction will we know what is actually going to be for sale?
I appreciate any help. As a side note, I am not looking for $500 properties that I think I am going to rent for $700 a month. I know the area very well that I am looking at. This is not so much a discussion as to why or why not buy in Detroit as it is about how the process works here specifically.
Thanks!
I sold my share to a partner a few months ago (for a small but very high-percentage profit).
My deed was lost in the mail. I was instructed to visit the Register of Deeds for a copy of official records, but you might want to call and ask if you need to do the same: http://www.waynecounty.com/deeds/index.htm. That being said, @Quinton Myers I don't think you need a copy of the deed unless you really want one - just call and ask if it's officially under your name.
@Michelle Petropoulos, very late reply, but if I recall correctly, homeowners were allowed to redeem their houses and adjacent vacant lots up until the week preceding the auction in 2015. Consider: why would the city turn away the original owner's money?
On the whole, the podcast is harsh on Detroit and for good reason, but I cannot think of a better training ground if you are resourceful, patient, cautious and looking for a very cheap education. I replicated the exact same process I did in Detroit in New York City and am set to close on a foreclosure next week.
Plus, Detroiters are surprisingly kind, fiercely protective and they love to talk about their neighborhood - even to some non-Detroit Asian guy who knocks on their door and asks if he can take pictures of their home as it's about to go into foreclosure! Haha.
Wayne county has their auction in Sept and October, its usually better to wait till October to participate because the prices start at 500 bucks, unless its a bundled sale or a premium property and then the price jumps to the thousands.
Wayne county has their auction in Sept and October, its usually better to wait till October to participate because the prices start at 500 bucks, unless its a bundled sale or a premium property and then the price jumps to the thousands.
I am not really interested in the $500 properties. The ones I am looking for will sell in the first round.
Well the $500 properties are both in the Sept and October auctions, its just that if you go in September you will have to pay all the back taxes owed. I have seen some good ones still around in October, but yes you do run that risk.
Hey all,
I'm a complete newb to BP and to real estate investing in general, but I've gone through over 10,000 properties scheduled for the 2015 foreclosure and am chugging along quickly. I'm only selecting properties in areas that have experienced growth (or have been highly recommended to me by a local) and that meet specific set of criteria (low back taxes, low property taxes, empty lots, proper zoning for improvement, etc). I'm hoping for a long-term return over the course of 15-20 years and will not need the money any time soon.
@Theodore B., I just need to clarify that I'm reading your comment correctly: the properties sold in the October round of auctions don't have back taxes attached to them? Like, any of the back taxes!? There are some buildings with $100,000+ - does that debt just disappear?
Hey all,
I'm a complete newb to BP and to real estate investing in general, but I've gone through over 10,000 properties scheduled for the 2015 foreclosure and am chugging along quickly. I'm only selecting properties in areas that have experienced growth (or have been highly recommended to me by a local) and that meet specific set of criteria (low back taxes, low property taxes, empty lots, proper zoning for improvement, etc). I'm hoping for a long-term return over the course of 15-20 years and will not need the money any time soon.
@Theodore B., I just need to clarify that I'm reading your comment correctly: the properties sold in the October round of auctions don't have back taxes attached to them? Like, any of the back taxes!? There are some buildings with $100,000+ - does that debt just disappear?
From what I understand, that is correct. If properties do not sell in the September auction, the go back up with a $500 minimum bid and all(with some small exceptions) liens get wiped out. Just a heads up, they recently extended the deadline to may12th for occupants to take care of their back taxes. Many of the homes that are currently listed will not actually go to tax sale.
That is incredibly helpful info to know, thank you. Do you know what determines the exceptions?
If you have a link that explains the policy, I'd be very grateful for it.
And yes - out of the thousands I've gone over, I've written down hundreds to make sure that some of them make it to auction, and I aim to win only a small handful of those (or more, if the auction goes well).
And yes - out of the thousands I've gone over, I've written down hundreds to make sure that some of them make it to auction, and I aim to win only a small handful of those (or more, if the auction goes well).
From what I understand, the big exception is IRS liens. They stay on the property for 120 days after it is sold. If the IRS does not collect within 120 days, they go away. Also, unpaid water bills after the date of foreclosure, but before the house is bought at auction are not wiped out... Leaky toilets, running faucets could cost hundreds(even thousands) more. I have heard that the city will work with you on these though.
Have you been to the Loveland website to see the upcoming properties? If you are not from Detroit or have not been to Detroit and examined the areas you are looking to buy, i suggest you visit before buying anything. I can honestly say that Detroit has issues unlike any other city in the US. That does not mean that there are not areas worth looking at, but the areas where homes are selling for $500 dollars are probably not going to be those areas.
Let me know if you have questions.
I will do a drive by and get you some pics if you want to work something out. Tell u what type of area its in.
Let me know
BTW. U said u are a newbie. This is not the type of props u should be dealing with. You can analize all u want. But you just won't understand this city. I see this not working out for u
First, thanks for your help and warnings.
I have to confess that I initially jumped onto the Detroit train after reading all of the glorified, romanticized coverage. A significant portion of my friends are rock musicians and I had just read Richard Florida's book "Rise of the Creative Class" - combined with the media, all signs seemed to point to Detroit.
I understand now how stupid and naive I was. I wish that I'd chosen my first area a bit more wisely. I will be moving on from Detroit after this project and will choose my next area based on statistics rather than media narrative.
However, I'm still hoping to buy a small number of unimproved lots with low property taxes - hopefully all on the same block. I've spent hundreds of hours on the Loveland site and used it to select empty lots in areas along Woodward Ave and in Greenlawn, Indian Village, neighborhoods along the water, as well as a small handful in Grandmont East/West and Outer Drive East.
A friend of mine has a passion for urban gardening, city rebuilding and a "frontier lifestyle" in rough areas - he's planning on moving to Detroit to create community gardens with a couple of organizations that are already there. If none of the organizations will accept the use of the land, he's agreed to maintain it (in order to avoid the fees for unkempt lawns, dumping, etc). I've tried to warn him against moving to Detroit, but he's...like that. I suppose I might be, too. We (and another newbie to property) are visiting in late July/early August. Maybe we'll have some sanity shocked into us then.
In my mind, the worst that can happen is that I'll lose a couple thousand per year in property taxes for 15-20 years (I'm hoping they won't dare to raise them unless the population starts growing). The best is that the city recovers and I'll be in a position to improve the empty land and sell. I'm guessing the true expected value is going to be somewhere in the middle.
What do you all think? I've put tons of work into this, but I think I can still be dissuaded if enough experienced investors tell me that I'm utterly off-base. I did expect to make lots of mistakes on my first major effort.
@Scott K., I'll let you know our dates as soon as we've made travel arrangements. I think we're going to cement them tonight.
Hi @Account Closed. I purchased my first property through the Wayne County Auction last fall. I did not have to pay any back-taxes or other liens and after only about $900 in light rehab, I have a property that delivers $800/month. The house is an 1100 square foot brick ranch with full basement. It was occupied by the prior residents at the time, and everything functioned including the newer furnace and hot water heater. I understand that my house was in much better condition than most and that my experience may not be typical. For those who have an eye to judge the full condition of a house by looking a the exterior, you improve your odds of finding a gem. I will definitely be back to pick up another property at the auction this year.
Congrats, @Stephen Lovett! Nice to hear there are at least a few success stories out there.
Sorry I am a little late on this discussion. I also have experience with the tax auction and I am surrounded by people on my team that are highly involved in wholesaling and holding these homes. Like @Stephen Lovett, I have found success with the auction, but we all must know its not just that easy of a story to it in every case. Especially to those out of state, don't have the slightest clue to the neighborhoods, and that do not have teams that are with boots on the ground. We can get into details about bidding/winning/titling, but be ready to deal with tenants currently that live in the house. Imagine if you lived in a house for years, ignored the "system" on getting on a payment plan, and all of a sudden house is taken over by someone that you dont know.
Trust me It can go many ways if you don't reach out. This step could be a decision maker from buying a gutted, burned home to an actual person that wants help and will cooperate once you take over the deed.. If you don't have the guts to knock on the door I would advise to get as much information from neighbors, or find someone that will help you. This will give you the confidence to bid to an extent.
I think you are starting in the right approach, and narrowing down your exact locations and exact houses. This is your 1 up on other investors that are very involved. Be aware there will be investors that will pull the trigger and overpay on anything and everything in desired locations.
@Account Closed
I do admire your efforts in hundreds of hours of research on the loveland site and "googling" what you can get from afar. Don't want to step on your toes, but your research is nominal to local wholesalers and investors that research these particular homes on a daily basis here and know exactly what to expect. And thankfully you have learned this approach can be deadly start to your investment portfolio. Don't be shocked by how much desired land location may and mostly likely will go for. There are lots of deep pockets that need to park their money. Not only that have the teams in place here that will cut and clean the vacant land and have a very good reason to speculate.One thing you and your friend should consider is leasing some land out from the city. Its almost free on your aspect.
Sorry I am a little late on this discussion. I also have experience with the tax auction and I am surrounded by people on my team that are highly involved in wholesaling and holding these homes. Like @Stephen Lovett, I have found success with the auction, but we all must know its not just that easy of a story to it in every case. Especially to those out of state, don't have the slightest clue to the neighborhoods, and that do ...
If you have purchased some properties at the tax auction in the past, I would be very interested in sitting down and talking with you. I have done quite a bit of research and I know what the properties I am looking at have sold for in previous years. Unless things go crazy this year(possible with all the media coverage) I am pretty confident in finding at least a few that are what I am looking for. I have found very little information on the actual bidding process though.
Hello All,
I had a few general questions about buying property in Detroit. If I do buy multiple houses during the auction. How do I get insurance? Do I need to get insurance before I receive the title?
Hello All,
I had a few general questions about buying property in Detroit. If I do buy multiple houses during the auction. How do I get insurance? Do I need to get insurance before I receive the title?
I buy property in Detroit. I find that it is easy as an out of state investor to pick up insurance on all of our properties.
Get in touch with:
Kristin Stead
AffinityGroupManagement
They are based out of Kansas City, MO
Tell her I sent you over. Hope this helps!
@Andika Powell
You don't need insurance before you receive title. Many of the properties sold in the auction are extremely difficult, if not impossible, to insure.
Ray--How do you protect the property from the time you purchase it to the time you receive a deed? If the property burn down.....are you out?!
As an out of state investor, I use Affinity Group Management for all of our insurance needs in Detroit. I have great luck with them.
...this is just to finish the story.
My partners and I (3 total, now) visited the city about a month ago and inspected 150+ properties. We knocked on every single door and talked to as many tenants and neighbors as we could. We've selected our top five properties, registered our LLC and have set our bidding maximums for the second round with overall goals for each home.
@Joshua Woolls @Mike Carino, thanks for the advice!
...this is just to finish the story.
My partners and I (3 total, now) visited the city about a month ago and inspected 150+ properties. We knocked on every single door and talked to as many tenants and neighbors as we could. We've selected our top five properties, registered our LLC and have set our bidding maximums for the second round with overall goals for each home.
@Joshua Woolls @Mike Carino, thanks for the advice!
Good job Clint! Now remember don't forget to expand your goal on what to do after you acquire the properties.. who do you need on your team locally? who is your boots on the ground? Who will manage? Point of contact to get title work cleared up? Who will evict if a tenant doesnt comply? Who will do rehab even the little things right away? What will you do on vacant properties over the winter? Keep the wheels turning my friend. You are on the right track.
Yup, we've got most of that down. Ordered a title search with Title One which should get emailed to me any day now (I mailed them a check a week ago). One of the three partners lives in Detroit - he's agreed to be the property manager and live in one of the properties if that's optimal. We're in the midst of writing out a formal contract for him. Still don't have a contractor for immediate professional jobs, though - do you have any recommendations?
We're planning to meet with an estate lawyer soonish to discuss the best structure for our partnership (or maybe an LP if that turns out to be best). The two of us who live in NYC definitely plan on following general advice and looking nearby for our next project, been meeting with a few realtors up here. It's shocking how few of them know of the 1% or 2% rule! Couldn't believe it.
Clint,
I purchased my first investment property last week on the September auction, this was in a good neighborhood in Redford. I will be looking to get some of the $500 properties for the October round, probably in not so good a neighborhood. Registration starts today October 2nd for about a week or so i believe. While i wait for the deed for my first house i will be looking to buy a few more for $500 and up, +taxes. I went to a workshop yesterday that provided several strategies that I'm looking to employ on this final round.
Good luck and i hope you have much success here and in New York
~Leon
@Leon L., congrats and thanks! Feel free to message me if you'd like to share some of your strategies, haha!
Best of luck to you with your goals - hopefully we can work together in the future.