Outside buyers drawn to Detroit's foreclosed homes

i just saw that article. i might buy 50 of them. there's got to be a catch. the property taxes and insurance has to be 10k or more a year. buy a home for 8k and spend 10k fixing it up and renting for $900. bs i don't believe that. who in detroit with 20% unemployment is going to pay $900 a month rent?
 
Quote from jnorty:

i just saw that article. i might buy 50 of them. there's got to be a catch. the property taxes and insurance has to be 10k or more a year. buy a home for 8k and spend 10k fixing it up and renting for $900. bs i don't believe that. who in detroit with 20% unemployment is going to pay $900 a month rent?
More...

Exactly! That's my thinking exactly. That's why I posted this on ET. Btw, SPCSDET is the ticker the S&P Home price index for Detroit. Still looking for a better chart...

http://www.bloomberg.com/apps/cbuilder?ticker1=SPCSDET:IND
 
Quote from jnorty:

i just saw that article. i might buy 50 of them. there's got to be a catch. the property taxes and insurance has to be 10k or more a year. buy a home for 8k and spend 10k fixing it up and renting for $900. bs i don't believe that. who in detroit with 20% unemployment is going to pay $900 a month rent?
More...

The article mentions that the government subsidizes rents... who knows...
 
Quote from short&naked:

http://news.yahoo.com/s/ap/20090309/ap_on_bi_ge/landlord_nation


Investor trap? Well-built homes for 6,000 USD? Sounds like a good asset play where you part of the home for free. What do you think? According to the article, Detroit has on eof the higest renter to owner ratios in the country.
More...

I see it as a case of "you get what you pay for." The land alone is probably worth more than $6,000 for most of these homes, but the price reflects other external factors such as Detroit's bleak prospects or the lack of potential buyers.
 
They could be located in high-crime areas. The recession would be making it worse. CNN said some houses there were going for $500. Just have to sleep with one eye open.
 
Quote from KrispyKreme50:

I see it as a case of "you get what you pay for." The land alone is probably worth more than $6,000 for most of these homes, but the price reflects other external factors such as Detroit's bleak prospects or the lack of potential buyers.
More...

Pretty much. What's house and land worth if no one wants to live there?

Anyone curious, search for Detroit in the real estate section of ebay. Some houses are a buck. I saw a 2650 sq. ft., two-car garage one for $2900 on a for sale site. Some around the $3k zone "look" fixable with some easy and cheap carpet/painting, etc, but, again, who would want to live there?

The government there has been corrupt or just plain incompetent for a long time. Check out videos of Monica Conyers if curious. There's one where she has trouble debating an eighth-grader "up in here." Not sure how she has any job, much less city council.
 
I was out there a few weeks ago for precisely this reason.

Any time I have seen urban distress and prices on this kind of level, it has been a long-term opportunity. However, I am not doing anything there yet simply because it seems obvious it will get worse in the short-term. The big 3 automakers will go broke, and the credit markets will seize up even more, and then the distress will increase. That is when to buy, not now IMO.

Still, the presence of articles like this is a contrarian sign of sorts. I remember in the late 90s reading a Financial Times headline "Property crash in the North [UK] - houses change hands in pubs for £500". Sure enough, house prices in the north of England pretty much hit bottom soon after and skyrocketed for the next 10 years. That was with a growing economy though, hence my caution for now with Detroit.
 
If you could buy a bunch of houses for $1, then get rid of the houses cheap, you'd have some relatively inexpensive farm land. What could you grow on the farm land without getting shot or getting your crops stolen?
 
You must log in or register to reply here.
Back
Top