Difference between a 10 dollar house and a 10K house (Detroit: real estate, condos)

[amazinmets73]

Hey folks, I have a question about Detroit real estate. I've never been to the city, but my general understanding is that it's very run down, houses are essentially given away, and if you want to live in one of the few decent areas, it's very expensive.

So, my question. If you wanted to buy real estate in the Detroit area, how much more would you get for 8-12K, as opposed to a house that's being given away for a dollar?

[skinnayyy]

Originally Posted by amazinmets73

Hey folks, I have a question about Detroit real estate. I've never been to the city, but my general understanding is that it's very run down, houses are essentially given away, and if you want to live in one of the few decent areas, it's very expensive.

So, my question. If you wanted to buy real estate in the Detroit area, how much more would you get for 8-12K, as opposed to a house that's being given away for a dollar?

The difference is that for the 8-12k house you are paying that much to the seller. For the 1 dollar house you are paying the 8-12k to the city in back taxes and other things.

Also,

Just to give you an idea, my great uncle just passed away and he lived in a house on the border of hamtramk and detroit, Literally. His house was in one city, and the garage was in another. His house was built a loooooooooong time ago and hasn't had any updates to it all pretty much. In the bed room there were 0 wall outlets and in the living room there was 1. This house sold for 29k. We didn't expect it to sell for more than 10k.

[amazinmets73]

Originally Posted by skinnayyy

The difference is that for the 8-12k house you are paying that much to the seller. For the 1 dollar house you are paying the 8-12k to the city in back taxes and other things.

Also,

Just to give you an idea, my great uncle just passed away and he lived in a house on the border of hamtramk and detroit, Literally. His house was in one city, and the garage was in another. His house was built a loooooooooong time ago and hasn't had any updates to it all pretty much. In the bed room there were 0 wall outlets and in the living room there was 1. This house sold for 29k. We didn't expect it to sell for more than 10k.

Makes sense. When something seems too good to be true, it usually is. So, if you purchase a house for 10K, just how rough will the neighborhood be?

[skinnayyy]

You likely won't want to live in it. Or it'll be in a decent area and then it'll be at least another 10-20k before you can live in it.

[amazinmets73]

Originally Posted by skinnayyy

You likely won't want to live in it. Or it'll be in a decent area and then it'll be at least another 10-20k before you can live in it.

20-30K to live in a decent area in a major American city is still a steal though.

[animatedmartian]

Nowadays, a livable house is around 30K, but many homes in Detroit are pretty old and it'd still take a fair bit to bring a lot of properties up to date. A move-in ready house in a nicer neighborhood typically goes for $300K+. Move-in ready condos downtown are around that range as well.

You usually can't judge a neighborhood by price, but by most comparisons not too many Detroit neighborhoods fall outside of the rough category. Things have been improving since the bottom of 2011, but there's still a lot to be desired in terms of city services and neighborhood conditions. Even the worst areas of Baltimore still probably look a little better than the average areas of Detroit. Crime tends to be spread pretty evenly across the city with only a few areas with moderately higher crime.

Anything less than $20K is usually to pay back the taxes owed on the property. The building itself will likely be hollowed out, burnt to a crisp, a just a pile of rubble.


https://www.youtube.com/watch?v=jijRIFpSbRY


https://www.youtube.com/watch?v=K7pe8GqSaMI

[bmantx512]

This reminds me of the soldier who posted here a few months ago. He bought a $5k house sight unseen and ended up in 48205 (aka Detroit's deadliest neighborhood). He came in full of spirit and put some major sweat equity in. I think he lasted 2 weeks and boarded the place up and never posted again.

There are places in the city limits where you can find a great bargain. But if you have never been here before, how would you know where those places are? Be very careful.

[AdemH]

I spent $19k all-in near Marygrove College and got it rented for $625. Not so bad.

[animatedmartian]

Originally Posted by bmantx512

This reminds me of the soldier who posted here a few months ago. He bought a $5k house sight unseen and ended up in 48205 (aka Detroit's deadliest neighborhood). He came in full of spirit and put some major sweat equity in. I think he lasted 2 weeks and boarded the place up and never posted again.

There are places in the city limits where you can find a great bargain. But if you have never been here before, how would you know where those places are? Be very careful.

Though that had nothing to do with crime. In fact, I don't think he ever got affected by crime while he was here. I think he mentioned crime felt pretty prevalent but nothing ever actually happened to him.

It mostly came down to the cost to rehab the house outweighed how much he was willing to put into it. Plus dealing with the city government, not having a car, and then having a 100-year flood in August didn't help at all.

People underestimate these cheap houses and think they're okay to live in once they buy but only if you have a whole bunch of money saved up and willing to put in a great deal of work or pay a contractor to do it quickly for you.

[animatedmartian]

Originally Posted by AdemH

I spent $19k all-in near Marygrove College and got it rented for $625. Not so bad.

That's good to hear. That was one of the areas Mayor Duggan targeted for improvement, right? Has the neighborhood seemed any different at all? (if you've any spent time over there since the purchase)