71–80 of 105 posts
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I was under the impression that most US houses in that price range will be cheapish wood and drywall? Not sure you'd get much reclaimed lumber worth anything out of there. Still - innovative idea.
These are older houses, most of them likely made from much better materials. Still, with the kind of weathering an empty house would get in Michigan, a lot of it could be totally ruined.
Detroit gets a bad rap. I've traveled quite a bit from 18-24- going coast to coast by car at least a dozen times. I always avoided Detroit because of the bad press it gets. This year Apigee hosted #apicraft in Detroit and it was AWESOME. I fell in love with the city. The outskirts are still rough, but Midtown to downtown was really, really good. The "opportunity Detroit" slogan everywhere paired with the local's can-…
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.
So, things like this always interest me, maybe it's long term living in a similar city or just idealism. Anyways, I've always wondered when these places will get so cheap, and so readily available that a single, long term interest, entity will buy a large portion of a major city. At some point, even with the tenants, tear downs, clean up, and taxes, land with that amount of infrastructure around it has to bottom out…
All those houses have been scrapped for copper and stainless steel already. Detroit has a huge scrapper problem - you cannot leave a property sitting for any amount of time before someone breaks in and starts scrapping the wiring and copper water pipes. There are even scrapping gangs. A friend of a friend went to the Herman Kiefer Hospital shortly after it closed in 2013. He was escorted out at gunpoint by scrappers - they had a few guys posted there 24/7 with firearms and walkie-talkies to keep other scrappers from coming in.
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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.
Land grab? Maybe. But at least someone is buying the property. The prices are very low for a reason, very little demand. I believe a renovation plan needs to be in place within 6 months of purchase. I very much doubt it'll happen for all 6000 homes, but will probably happen for at least some portion of them. I really hope the city doesn't twiddle its thumbs following up on these.
True, sort of. But the contrary point is that they want to discourage e.g. people from New York buying some home for $10k out of pocket, not doing anything with it and hoping to flip it in 20 years, as in any big city a plot like that alone is worth $50-60k. Demand is great, but you really want to get people to actually live there, too. Haven't heard of any requirements for a plan, can you elaborate? Afaik, you own t…
I was recently buying some reclaimed lumber, it was quite expensive. It occurs to me that 6000 homes depending on how old they are might be worth that much in materials alone.
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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.
Where in the country are you that you're realizing those kinds of profits?
Do you believe this is rare? I don't know the real estate market well, but it seems pretty plausible to me.
First thing I'd do is look for a city where the influx of population exceeds the new home starts. If you find something like that early on, after a few years, your return will be pretty dramatic as rental prices go up, but your mortgage is based on the price at the time you bought (which may be well below the current value of the property.)
Between appreciation and the rent paying down your mortgage balance, plus possibly a return on the rent itself, a return on equity (which really is just the downpayment plus maintenance costs) could be pretty high.
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You also need to sink another ~$24 million into the property to demolish the houses, and if you don't make sufficient progress it will be repossessed. That's gonna be a bunch of jobs, so I'm not sure Detroit would care. I also would think that you would probably want to have more liquid property, or at least something that might possibly generate some marginal income.
It can't be "repossessed" if you own it. (And it wouldn't be repossessed anyway since the bank probably doesn't want it back :p)
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.
Still, if I lived in Detroit I would likely buy a few lots because why not? For that price I might use em for art projects or something.