Post: #1

I see houses online for $5,000. Would it be a terrible idea to buy one of those houses? The place definitely has to pick up in he next decade

Post: #2

Depends on the area. If the area is ran down, keep in mind that a lot of those houses probably have rehabilitation costs that can run you close to what you would normally pay for a house. Plus the lack of police presence and services might be an issue too.

Post: #3

/thread-32398.html
dupe

verdict: bad idea un less you can buy the whole block

Post: #4

I talked to my father about this a while back, we are from the area and he is pretty big into real estate. From what I remember, if you buy one of these houses you have to be prepared to pay the taxes owed the day it is signed over to you. Taxes for the city of Detroit can be up to 5k a year, so you could end up paying 15k in back taxes for some shithole of a house. Being from there, it really is a shithole and I wouldn't do it. If you want to make some money investing in real estate out there, north of Detroit in places like Utica/Sterling Heights there are huge amounts of arabs moving in and they all want to live near each other. If you can grab some places out there to fix and sell or rent, you shouldn't be sitting on anything for too long.

Post: #5

The Chinese are buying houses in Detroit for a reason I assume. They are known to love a gamble though.
http://www.theguardian.com/cities/2014/j...ts-rebirth
http://www.nbcnews.com/news/china/chines...it-n253186
http://www.forbes.com/sites/gordonchang/...t-detroit/
http://www.zerohedge.com/news/2014-05-06...ted-states

Post: #6

Curious, as I read the other linked thread, how do the taxes work in Detroit if someone purchased 4-5 homes, knocked down the homes, removed the rubble, then kept the land? I saw a post indicating that there as a time limit on a purchase, which seems a little strange, as most places will allow you to buy properties and hold.

A lot of property taxes (not all) are based on the size of a house, ie: 1200 square foot homes will be more than 600 square foot homes. If the property taxes are simply based on the home size and with crime being as bad as reported, it might be a good alternative to remove the homes and keep the land.

Post: #7

Detroit and those $5k homes will lose you money unless you're on the ground, managing the property very closely. There is a reason why these homes cost $5k. Most I wouldn't touch if they were given to me.

There are much better places than Detroit to buy. I buy in Northern Ohio, about an hour away from Detroit and buy in the 25-45k range. This puts me into a smaller, older home but attracts decent tenants and I don't have to wear a bullet proof jacket when driving the neighborhood. The cheapest home I purchased was $11k - not $5k but it's a good property on a good street that spits out money every month.

Real estate - whether a $5k home or a $500k home is not a light undertaking.