Mystery Bidder Bids $3.2M for 6000 Detroit Homes • Hacker News Board

Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes

#101

Post by trhway » Sat, Oct 25, 2014, 4:35 AM UTC

jmspring wrote: post #100

trhway wrote: post #90

Earlier quoted context omitted.

>a consideration for impact of household count yep. I'm already paying a tax for having a dog (and some municipalities are now taxing cats too), so i definitely wouldn't mind if others had to pay for their family members too as, obviously, a child is a bigger drain of public resources than a dog or a cat.

Where are you that taxing pets is happening? Don't mess with my furballs.

pretty much any city in Bay Area and i think in all CA have that yearly registration/license fee

Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes

#102

Post by [deleted] » Sat, Oct 25, 2014, 1:03 PM UTC

IkmoIkmo wrote: post #31

e40 wrote: post #28

I wonder what the property taxes, per year, will be on the 6000 parcels. And, since many cities allow you to challenge the stated value, it could be very expensive, in time, to challenge 6000 parcel values.

Me too. I'm actually in Europe, only lived in Canada, but I was inspired by this guy: http://www.buzzfeed.com/drewphilp/why-i-bought-a-house-in-de... So I looked around a bit... the problem is you can often get a cheap house, but only if you take over taxes on the property, which are often multiples of the value of the house as they accumulated over the years. And then there's annual property tax which are really hig…

[deleted]

Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes

#103

Post by totalrobe » Sat, Oct 25, 2014, 2:34 PM UTC

MCRed wrote: post #78

sedachv wrote: post #69

Earlier quoted context omitted.

Where in the country are you that you're realizing those kinds of profits?

I think this is plausible, since return is based on your investment. EG: You buy a $300k property, maybe have $40k in rent, $6k in maintenance costs, but only put down $30k on the property, your total investment is $36k. On rent alone you're returning $4k (spread between mortgage+maintenance and rent income.) $4k on a $36k investment is %11. But on top of that you have added ~%50 of your mortgage payments (which are…

40k rent coming in on a 300k property?! You're off your rocker...

Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes

#104

Post by tonyarkles » Sat, Oct 25, 2014, 4:04 PM UTC

totalrobe wrote: post #103

MCRed wrote: post #78

Earlier quoted context omitted.

I think this is plausible, since return is based on your investment. EG: You buy a $300k property, maybe have $40k in rent, $6k in maintenance costs, but only put down $30k on the property, your total investment is $36k. On rent alone you're returning $4k (spread between mortgage+maintenance and rent income.) $4k on a $36k investment is %11. But on top of that you have added ~%50 of your mortgage payments (which are…

40k rent coming in on a 300k property?! You're off your rocker...

I'm using Canadian interest rates because it helps me do gut-checks related to the current property values around me. A $300k house here is a decent house. A 5-year closed fixed mortgage at today's rates (3.24% on promo) works out to $1456/mo. From what I've heard from friends, they're renting relatively most homes around here for about that price. Looking at MLS, there are significantly nicer homes in the $300k price range, and it probably wouldn't be a huge problem to rent one of those out for $1750/mo ($300 profit/mo = $4k/yr)

While the $40k/yr rent number above does seem suspicious, the percentages otherwise work out reasonably well on the back of my envelope. Another important thing to consider is that at the end of it, even if you made $0/mo on the property, you still end up with a (hopefully) valuable piece of property to sell that had the mortgage paid off by the renters.

Re: Mystery Bidder Bids $3.2M for 6000 Detroit Homes

#105

Post by seanmccann » Sat, Oct 25, 2014, 9:18 PM UTC

larrys wrote: post #94

ams6110 wrote: post #92

Earlier quoted context omitted.

Many if not most of the houses are beyond renovtion. A fair amount probably have fire damage (arson in Detroit is legendary). Sitting for years with broken windows, holes in the roof, etc. leaves them rotted shells

The idea would be to bulldoze them and then just sit on the land until you need it for some reason. Carrying costs are obviously much lower that way you can't vandalize a lot (although you can dump on it of course..)

From what I remember, this is exactly what Detroit is trying to avoid. They have these auctions with the expectation that they will be lived in either by the owner or a lessee.