OCP gathering property for "New Detroit"
Mystery Bidder Bids $3.2M for 6000 Detroit Homes
51–60 of 105 posts
Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes
#52Pretty easy to see how this'll turn out: Some moderatley rich person with access to a 10% down payment of 3.2M is taking a gamble and is in way over their head... Just wait, within a year they will lose ownership of all these properties in bankruptcy and they'll be back in the hands of the city.
Real estate investor here. The buyer probably paid all cash...these sort of deals require that you pay cash, so very unlikely that they leveraged against these properties.
However, they will likely have raised capital with some other portfolio of properties as collateral. So not all of this is coming from his savings.
I see others talk about how difficult it is to get a mortgage, etc. Let me just say from personal experience that it is not difficult to get a business loan (which is what this buyer will need, not a "mortgage"). Especially if he already has an established business.
Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes
#53The one thing they're not making any more of in this world is land. $3.2M isn't much money for a very large number of people in this world.
The one thing they're not making any more of in this world is land.
$3.2M isn't much money for a very large number of people in this world.
Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes
#54Sounds like a possible Dan Gilbert project. Context: http://www.forbes.com/sites/joannmuller/2014/09/29/gilbertvi...
Very doubtful. Gilbert has only bought skyscrapers in the downtown area. He bought the buildings for what it would cost to rent that much space for a year in Manhattan. Lately Gilbert has been outbid at auction by Chinese investors so he's exhibited financial discipline. This mystery bidder is paying $500 per house and it would cost ten times that much on the low side to tear down the house. Somebody needs a large ch…
Tom Gores is a good guess, but I think the homes are too distributed to assemble a sizable plot of land. Besides, if you want to buy acreage in Detroit, it's easier to buy an couple old industrial lots than to pay $30m to tear thousands of homes down. Besides, it's hard to imagine a stadium in the middle of a residentially zoned neighborhood.
Here's why my money is on Gilbert: http://nextcity.org/daily/entry/hey-dan-gilbert-you-cant-bul...
> "Business owner Dan Gilbert has bought more than 30 buildings with 7.5 million square feet of office space in Detroit’s central business district."
> "Now, Gilbert wants to get involved in Detroit’s neighborhoods."
> "Part of that deal is a new task force faced with the indomitable challenge of figuring out what to do with Detroit’s tens of thousands — no one really knows the exact number, some say 78,000 — abandoned buildings. "
> "Gilbert is on that task force"
> "'To get the neighborhoods going, we’ve got to take down the 78,000 or so — we don’t even know the exact number of structures that need to be taken down, mostly houses,' Gilbert said..."
Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes
#55Sounds like a possible Dan Gilbert project. Context: http://www.forbes.com/sites/joannmuller/2014/09/29/gilbertvi...
Very doubtful. Gilbert has only bought skyscrapers in the downtown area. He bought the buildings for what it would cost to rent that much space for a year in Manhattan. Lately Gilbert has been outbid at auction by Chinese investors so he's exhibited financial discipline. This mystery bidder is paying $500 per house and it would cost ten times that much on the low side to tear down the house. Somebody needs a large ch…
What would the bidder do about the houses they won't own, on that land? It could be prohibitively expensive to buy the remaining houses.
Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes
#56There is a huge market for international property speculation especially with American property. The owner will likely sell each house for a tidy profit (to another investor), the new owner of only 1-5 houses will turn around and try to sell those back to Americans, realize s/he got had. TL;DR international property scam References http://www.nuwireinvestor.com/articles/waterfront-properties... http://www.crainsdetro…
Can you explain the "scam" part?
Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes
#57The one thing they're not making any more of in this world is land. $3.2M isn't much money for a very large number of people in this world.
The one thing they're not making any more of in this world is land. Huge portions of the US remain undeveloped or under-developed. Land isn't really in as short of supply as some would have you believe. $3.2M isn't much money for a very large number of people in this world. $3.2 is just the purchase price. The article says the buyer would be looking at another $25-million to demolish the structures that can't be salv…
Agreed. But really $25 million isn't that much for many people either. There's a handful of single-family houses in my town that sell for that much.
Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes
#58There is a huge market for international property speculation especially with American property. The owner will likely sell each house for a tidy profit (to another investor), the new owner of only 1-5 houses will turn around and try to sell those back to Americans, realize s/he got had. TL;DR international property scam References http://www.nuwireinvestor.com/articles/waterfront-properties... http://www.crainsdetro…
Can you explain the "scam" part?
Evidently, speculation == scam now.
Also, I'm one of those people who buy 1-5 properties from bigger investment firms. My return (with rentals) varies between 17-20%. So, no, I don't feel had.
Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes
#59There is a huge market for international property speculation especially with American property. The owner will likely sell each house for a tidy profit (to another investor), the new owner of only 1-5 houses will turn around and try to sell those back to Americans, realize s/he got had. TL;DR international property scam References http://www.nuwireinvestor.com/articles/waterfront-properties... http://www.crainsdetro…
Can you explain the "scam" part?
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Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes
#60The one thing they're not making any more of in this world is land. $3.2M isn't much money for a very large number of people in this world.
The one thing they're not making any more of in this world is land. Huge portions of the US remain undeveloped or under-developed. Land isn't really in as short of supply as some would have you believe. $3.2M isn't much money for a very large number of people in this world. $3.2 is just the purchase price. The article says the buyer would be looking at another $25-million to demolish the structures that can't be salv…
Land can potentially be in short supply in areas people want to be located, especially land locked cities.