[themaster]

Thinking of buying a home.. want to pay little.. but can pay more..

Wondering how the $1 houses work? What's involved? (I hear you have to fix them up to make them legally liveable)

Or what neghiborhood are decent value and cheap

[scolls]

Ugh another out of towner hear's about cheap housing in Detroit and thinks he's going to be the next real estate mogul. We aren't all dirt poor here. There are plenty of wealthy people who could afford these dollar houses if they wanted them. There's a reason they don't.

Here's how it works. Homeowner doesn't pay taxes. After two plus years county forecloses on property. Property goes to auction. Property typically sells for under one thousand. Here's the catch. The new buyer has to pay all the backed property taxes, interest and late fees that accumulate of two plus years. Any unpaid utility bill needs to be brought up to date. The winning bidder can't look at the property before hand, unless of course, you break into the property prior to bidding. These backed taxes and utilities are typically over 10,000. These backed taxes and fees are due the day you win the auction. Then you have to put tens of thousands of dollars into them to get them livable and you're stuck in a bad neighborhood. You don't get something for nothing.

[Bydand]

Scolls nailed it.

[chiroptera]

Unpaid utility bills don't go with the house....taxes do unless the seller (who bought the house at auction) paid them. Not sure about water bills...I thought the water/sewer bill lein was against the previous owner or occupant and not the buyer's responsibility? I don't know about Detroit...in Flint, annual taxes on a typical small crappy house in the ghetto are well under $1,000 a year; so back taxes may be about three grand, give or take.

But even if you do find a house with no back taxes for, say $1.00 or $500 or whatever (there's plenty out there) it may NEVER be worth whatever you would need to put into it to make it liveable. Scolls is right about people from out of state finding these incredibly cheap Michigan homes on eBay or wherever....but you really, really have to know the area and know what you are getting into. I'm sure there are thousands of people regretting the ten dollar house they bought after they realise what a worthless money pit a ghetto house can be.

And no, you're not likely to be able to rent it out and make "passive income." I've seen the ads claiming that to be the case - mostly a crock. In many of these neighborhoods, you can barely turn your back on a house without people coming in and stripping it clean of anything worth 50 cents, and finding "good" renters willing to live in these one-dollar-house areas...well, good luck. You'd be lucky to find renters who won't strip your house, or burn it down.

If you're considering moving to a depressed area of Michigan to take advantage of cheap real estate, you'd better be aware of the culture shock you'll experience moving from Colorado to Michigan. Michigan is a great state in many ways, but the vibe and everything is very different to Colorado. I think personally that Michigan is more beautiful and unspoiled than Colorado (in a less in-your-face way) but the culture is different and unless you've been to depressed rust-belt cities and spent some time in them, you may not be prepared for the level of decrepitude in some places.

There are some good deals for sure (I got one last summer), especially compared to Denver (I lived in Colorado for many years so I know.) BUT. You have to know the areas very well, and be realistic about what the costs are. And for heaven's sake don't buy anything online sight unseen, no matter how pretty the pictures are and how good a deal it seems! I lived here for almost four years before deciding to buy cheaper houses...I have bought two here (Genesee county), but I know the area really well by now. There's money to be made and great deals but again: you have to know the areas you're looking in well.

Were you thinking Detroit, rural properties, Flint, where?

PS: I have done quite a bit of home improvement type work with a company based on the east coast that buys cheap foreclosed houses in depressed areas - Buffalo, Flint, Detroit, down in PA....they sell the houses on land contract to people who can't otherwise qualify for home loans. Usually for about ten grand, at least in the Flint area. About half of their homes require payment of back taxes before the buyers get title and it's typically about two grand. They advertise the homes primarily on craigslist. Almost all of them are gutted shells in extremely blighted, high-crime areas, that require many thousands of dollars (and/or hundreds of hours of labor) to become liveable houses that in the real market would be worth at most $5,000.

[tjay]

heard bad stories about this....involving a squatter, a bathtub and defecation.

[skyl4rk]

Tax sales are coming up soon, generally you can start looking at the listings in July.

http://metropioneer.com/index.php?op...d=50&Itemid=83

[chiroptera]

Originally Posted by tjay

heard bad stories about this....involving a squatter, a bathtub and defecation.

A little poop is no big deal compared to arson....

Firefighters try to protect business on Flint's east side from massive fire | MLive.com

Rash of fires in Flint thought to be for 'perverted political purpose' | MLive.com

Several Flint arson fires amid layoffs : News : ConnectMidMichigan.com

It is really common for renters or homeowners in the Flint area to strip, then torch/burn homes, after being evicted for non-payment.

I don't want to make it seem like every part of Flint is a cesspool, or everyone who rents is a low-life! That is not at all the case - I have good renters in my Flint house and there are some really, really nice Flint neighborhoods and a lot of good people living in the city. The trouble is, the majority of the city (by population or square miles or by whatever metric) is, well, kind of a cesspool. So the good neighbors and good neighborhoods are surrounded by cess.

[scolls]

Taxes on Detroit properties are typically $3000 a year. You have to have gone at least 2 years before your house is foreclosed upon. When all is said and done, you're looking at 3 years worth of taxes that have had compounding late fees and interest added on. My old house in Detroit according to Wayne county is up to $10,000 in backed taxes and it hasn't even hit auction yet.

Whether your buying a foreclosure, auction property, or a property from a private owner, you still need to check on the utilities. The current homeowner is responsible for backed utilities. If the previous owner has a backed water bill, you're responsible for it.

Finally, I'm pretty certain the OP is talking about Detroit since that's the only place the media broadcasts about one dollar homes.

[chiroptera]

Wow, I didn't think Detroit taxes would be so high....my little east side Flint home costs me about $840 a year.

Yah probably the OP is talking about Detroit, but there have been a lot of cheap-cheap Flint homes up on eBay too, and some recent news stories about those as well.

[mostie]

Originally Posted by themaster

Thinking of buying a home.. want to pay little.. but can pay more..

Wondering how the $1 houses work? What's involved? (I hear you have to fix them up to make them legally liveable)

Or what neghiborhood are decent value and cheap

If the houses are in Detroit, that alone would scare me half to death- and I've never even been there-closest I was, was on 6 Mile coming back from the zoo and at the red lights, people were coming up and banging on the windows for this, that, and the other. By the time we hit an area I recognized as close to home, I was in tears and shaking. So...when my husband tries to talk me into a Redwings game in Detroit, nosiree, HUH uh, lol.

I agree with anyone who thinks that "if it sounds too good to be true...it probably is".