91–100 of 105 posts
Pretty 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.
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There is some contiguousness but they are mostly spread all over the city. Take a look at the red properties on this map (zoomable): https://whydontweownthis.com/2014/mi/wayne/detroit#15/42.347...
"but they are mostly spread all over the city" 6000 homes spread out also means you can also create a mini company town by essentially luring people (for a new company) to the city and giving them a choice of different properties, renovated and ready to go with efficiencies gained by having so many to deal with. (Similar to when, say, Levittown was built (all in one area of course but same concept with construction).
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Yup. There are plenty of people who can sit on an illiquid 3.2M investment for an indefinite period of time. Barring a dirty bomb, nuclear war or government collapse, I can't see 6000 lots in Detroit for $3.2M not being worth 10x that in 30 years.
For anyone wondering like I did, that would be 7.75% annual return, compounded once a year.
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"but they are mostly spread all over the city" 6000 homes spread out also means you can also create a mini company town by essentially luring people (for a new company) to the city and giving them a choice of different properties, renovated and ready to go with efficiencies gained by having so many to deal with. (Similar to when, say, Levittown was built (all in one area of course but same concept with construction).
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
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For anyone wondering like I did, that would be 7.75% annual return, compounded once a year.
Except that once you own those properties, you have to pay taxes and perform basic upkeep. Even just tearing down the derelict properties would each up most of the 10x gain.
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I wonder if anyone in Detroit calculated pros and cons of "defragmentation": moving people to several designated areas and shutting down infrastructure in vacated blocks. I understand that US is not North Korea and it is easier said than done, but still would be an interesting calculation.
The people that have stuck around thus far tend to be really attached to their current location. If you get them to up and move, they might as easily move to another city (maybe where their kids are) then to the new district.
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…
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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?
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Whole vs hole, but nice typo on my part. Not all municipalities are booming, I think some form of revised prop 13 coupled with a consideration for impact of household count would be a bit better.
>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.