Radical cheap: $1,000 homes

[JI7]

Source: cnn

There are 18 listings in Flint, Mich., for under $3,000, according to Realtor.com. There are 22 in Indianapolis, 46 in Cleveland and a whopping 709 in Detroit. All of these communities have been hit hard by foreclosures, and most of these homes are being sold by the lenders that repossessed them.

"Foreclosures have turned banks into property management companies," said Heather Fernandez, a spokeswoman for Trulia.com, the real estate Web site. "And it's often cheaper for them to give these homes away rather than try to get market value for them."

In Detroit for instance, Century 21 Villa owner Randy Eissa has a three-bedroom, one-bath bungalow of about 1,000 square feet listed at just $500. It's a nice place with lots of light, but it needs a total rehabilitation inside, which Eissa estimates will cost between $15,000 and $20,000. But that's not bad, considering that the home last sold for $72,000 in late 2007, according to Zillow.com.

Often buyers are legally required to rehab these homes to bring them up to code. In Detroit, buyers are required to sign Affidavits of Compliance Responsibility, which obligates them to make repairs outlined in an inspection report. Only after that can a certificate of occupancy will be issued, which makes the house legal to live in.

But even factoring in these costs, they're still bargains.

Read more: http://money.cnn.com/2009/01/08/real_estate/thousand_dollar_homes/?postversion=2009010812

[bluestateguy]

1. Banks are drowning with houses they cannot get rid of

They don't want to be in the real estate business, and as long as the bank has to hold on to these houses, they have to pay the property taxes.

[Rabrrrrrr]

2. Yeah, sure, but they're in Indianapolis, Cleveland, Detroit, and Flint - all utter shitholes

and the homes, I'm sure, are in the total shithole backwater areas of those shitholes.

Of course the homes are cheap.

No self-respecting human being would live in any of those areas.

[JI7]

if you think the United States Auto Industry will improve

it might be a good investment.

[JI7]

if you think the United States Auto Industry will improve

it might be a good investment.

[notesdev]

8. if you think the United States Auto Industry will improve

you should study economics some before you lose your money betting on it.

Both GM and Chrysler are insolvent. One or both might stumble on for a while yet as a zombie corp propped up by regular infusions from the Treasury, but I wouldn't count on it.

[OhioChick]

10. You're right.

Until the majority of the public have decent paying jobs, the new cars will sit and rust.

No jobs equal no recovery.

[JI7]

3. if you think the United States Auto Industry will improve

it might be a good investment.

[OhioChick]

4. I know a family that lived in the suburbs of Cleveland...

Nothing fancy. The couple both lost their jobs and are now living in the "shithole" of inner city Cleveland. Sad thing is.....They are "self-respecting humans."

Times are tough. Real tough.

[pnwmom]

11. "No self-respecting human being would live in any of those areas"????

But you're not a snob, are you?

[bread_and_roses]

13. Glad some others picked up on this as well

I was going to respond but found myself too angry. I don't live in those communities, never have, but from what I know, they were full of working class people, and I would imagine a good few of those left there were once working, and would work again.

As for our "underclass" here in the US, to whom I presume the OP of that remark was referring, if we had programs and jobs for the unemployed and undereducated, including those of our citizens from our inner cities and urban areas who've been abandoned to third world conditions without hope of escape for about forty years now, we'd soon see that most of them are "decent human beings" too, given half a chance.

[FedUpWithIt All]

17. I know a couple who lived in one of those "shitholes" for a couple of years.

They lived very frugally and were able to pay off their home in less than a decade. They sold the home and moved into a another that was a step up. They were able to pay more than half down on the second home. They were able to nearly pay off this home in the next few years. Their final move was to a $250,000 home. They paid cash for over 3/4 of it. They are (have always been) both factory workers and some of the most self-respecting people i have ever known.

The OP is entitled to his/her opinion. Thank you for seeing how narrow and disrespectful that opinion is.

:hi:

[No Elephants]

24. That was not the OP.

[FedUpWithIt All]

48. I know. I was thanking kenzee13 for sticking up for people like the ones in my post.

:hi:

[JeanGrey]

15. No kidding. Who wants to live there?

[FedUpWithIt All]

16. I have family that lives in Cleveland. n/t

[Blue_Tires]

20. you never know, things can get turned around

if some jobs get created in those areas, they can get reborn faster than you think...and the "No self-respecting human being would live in (fill in the blank)" line has been said about every major/minor city or region at one time or another...Commercial/residential developers with a little foresight and patience make a killing in depressed areas

[salin]

21. ahem... thanks for letting me know that I am not a self-respecting human being

I live in Indy - in a transitional neighborhood. There is a story but given that I have now been declared a not self-respecting human being, I won't bother telling it.

[Le Taz Hot]

23. I live in Fresno.

I feel your pain by way of lack of respect. We're all toothless, uneducated, we're all "okies" and "arkies" and we smell. These are actual posts by DUers about Fresno, most of whom have never been here but they've "heard things." There's a poster in the California forum that is obsessed with posting bad news from Fresno. Go there and you'll see who I mean. She lives in an entirely different part of the state, but she "knows people." Fuck 'em. There's good and bad in every area.

[shrike]

26. I like Indy

It has its downside, sure, but when I've visited people have always been incredibly nice. There's a lot of neat things going on in your downtown. I like your museums and zoo.

People sure love sports down there, though; I'm not much of a sports fan myself.

[sufrommich]

32. Do all "self repsecting human beings" live in pretty places?nt

[Lorien]

34. There aren't any backwater areas of Cleveland

I've lived in Cleveland heights, my grandparents lived in Mayfield Heights (a Cleveland suburb). There are many upscale areas in Cleveland, plus it has decent schools, great museums, beautiful parks and one of the best orchestras in the world. If the weather weren't so brutal in the winter I might still be there.

The castle at one of the Cleveland metroparks:



Homes in the "shithole" of Cleveland:









The Cleveland Museum of Art:





Case Western Reserve campus:

[du_grad]

49. There are very nice areas in Cleveland

My sister-in-law lives in Cleveland Heights now but used to live in Shaker Heights. The writer who described Cleveland as a s**t-hole has obviously never been there. The pictures posted by Lorien are pretty representative of the area, although there are houses at least twice as big as the ones she posted. She forgot to include the Maserati and Jaguar dealerships nearby, however. These are NOT cheap neighborhoods to live in.

Yes, there are some nasty areas in Cleveland. I live in Toledo and there are areas here that are bad also, as well as in Detroit. As someone pointed out in another reply, however, these are heavily democratic areas and Obama wouldn't have gotten Ohio without them. So, you can be happy the s**t-holers vote!

With all the problems that California is having right now you couldn't pay me to live out there. I predict the Great Lakes cities will rise again once the potable water starts running out in the southwest and Florida. We're sitting on a pile of it here, if we can keep it clean. It probably won't happen in my life time, but it WILL happen. There has been talk in the past of selling Great Lakes water to other states via pipeline, but I think a lot of that has been nipped in the bud - so far....

[Javaman]

35. that's very right wing of you...

nice to know that you really care about people.
:sarcasm:

you need to take a good look around. Many of those so called "shitholes" you refer to, vote Democratic, because these same "shitholes" have been left to twist in the wind by the repukes.

man, I guess you opted out of the humanity part of a personality.

[Romulox]

37. What a DISGUSTING thing to say. nt

[Strelnikov_]

42. "No self-respecting human being would live in any of those areas"

Wow.

[blue_onyx]

44. I would love to know what wonderful area you live in

Probably somewhere no better than the cities you listed. You've probably never even been to any of those areas. What an ignorant statement.

[Alexander]

51. You really screwed up with your post. Time to apologize.

[notesdev]

5. If they were bargains, people would be snapping them up

too bad you have to have $20k cash to spend on these residences and take your life into your hands to live there.

[babylonsister]

6. Wow. We need some smart bucks to buy these places up

for people who need them, and the need is great.

[OhioChick]

7. That would be a good idea.

So many families are in dire need.

[ProgressiveProfessor]

9. If they were in California, it would be a real steal

Prop 13 (which has decimated local governments and school districts) would protect the buyer from rising property taxes. Land alone would be worth more than that if its in a developed area.

Other places are just hiking tax rates to maintain services and it is turning in to a downward spiral in some areas.

[Liberal_in_LA]

18. RIght. In California, most of the home value is in the land.

[flvegan]

12. Any taxes due, liens filed on these properties?

I'd run a full title search before I even considered one of them.

[No Elephants]

25. Always necessary when buying real estate.

[Abq_Sarah]

43. That would be my biggest concern

I'd want a clear title.

Additionally, the renovations might not be as financially dire as stated. I'd want a full report on the plumbing and electrical and then I'd get a second opinion.

[Blandocyte]

14. Circling

We are circling the drain.

[MajorChode]

19. It's a great time to become a slum lord

Just make the minimum updates required and rent them out.

[comtec]

22. Might be an intersting investment...

I can certainly afford to drop 1k Euros, which would buy me almost 3 units at 500 usd.
I'm sure what they aren't telling us is the back taxes, et al, that the buyer has to pay on these.

Personally, I'd love to buy some, and sell them BACK to the families that were EVICTED from them for say.. double what I paid (2k) and to set up a payment plan.

I'm dubious about the $20k+ to fix them up, but it's be interesting to see.

I know plenty of people who are skilled in the art of building houses, etc.

I'm sure I could work out something with the tenants, as far as "as long as you do the repairs, you can count that as your rent". Then when it's livable, sell it to them for just enough to cover my costs. Wash, rinse, repeat.

Before long, you'll have families back in their homes.

just an idea.

Everyone profits, everyone's happy, except the banks... fuck them!

[snooper2]

27. You have to know what you are getting into...

First- you'll have to have a guard stay there while you are doing construction so nothing gets stolen...including the plumbing.

Many of these home were never taken care of properly so you are talking termites-wood rot-plumbing that leaked for years---

Also- you then have the problem of the surrounding neighborhood- even after your done fixing up the home. The best chance is to do whole neighborhoods at a time. Then you need good working folks to move in to that crime ridden area......

If it was a easy deal to do- people would already be doing it...

Look at this listing for $659 - Then scroll down to the map and look at the birds-eye-view

http://www.realtor.com/search/listingdetail.aspx?sby=1&pg=15&srcnt=8282&sid=20c8322dd3b44147927c1e429eeb1e46&fhcnt=18&loc=Detroit&usrloc=Detroit&fhpg=5&lid=1104957356&lsn=143

[comtec]

29. Well I wasn't expecting it to be EASY...

or cheap.
My thought was simply to see if it would be possible to make life a little more worth while for the poor families who lost their homes.

the idea basically being have them rebuild it themselves, providing what capitol on demand is needed for supplies.

But yeah, if I had that kind of money (10's of 1000's+) i'd probably buy out whole neighborhoods, tear them down, and start from scratch, employing as many local unemployed as possible, then sell them for a modest profit, making sure the builders get first choice, and good deals.

I just hope there are a few (well to do) types who are willing to consider such a neighborhood rebuilding program.

[tabbycat31]

38. I would do the same

I love how the listing said $3 a month. Even I could afford it.

I'd love to buy up neighborhoods in areas with high unemployemnt,t hen hire the unemployed to fix up the houses. That would be on my list of things I'd like to do if I won the lottery.

[MajorChode]

45. I was a slum lord back in the day

I used to have a couple of rent houses I paid roughly $10K each many years ago. I rented them out for $250 per month. Since I was undercutting everyone else in the area on rent, I never had a problem keeping them rented out. Even after expenses I always cleared at least $2K per house per year, which was a reliable 20% return on my investment. It was mostly immigrants who rented them out and I never had any trouble with any of them. I never even had to take an ad in the paper to rent them out. Just a sign on the lawn got the house rented out in a day or two when the old renters moved. When I moved away from the area, one of my renters bought one of them and I sold the other one for more than I paid for it.

[shrike]

28. I was born in Detroit

Lived there briefly as an adult. Some of the neighborhoods are modest, but there are others, like Palmer Park, which had really good housing stock. Seem to remember there was a Frank Lloyd Wright house over there, in private hands. Don't know what it's like now.

The biggest drawback, IMO, of buying a home at that price would be the tax bills and the money you'd have to spend to get it up to code and liveable.

But if I were young, male and an amateur handyman, I'd think about doing it.

[slackmaster]

30. $1,000 for a house is no bargain if there aren't any jobs in the area

Also, property taxes and insurance on those homes will run you about what a normal mortgage would cost elsewhere.

[Dukkha]

31. Most I'm sure would require very extensive renovations

If they went into foreclosure then the previous owners couldn't afford to keep the maintenance up plus they've been sitting empty for some time. With no sources of income in the areas they are essentially worthless.

[democrat2thecore]

33. Cleveland? Compare it to the WORLD - It's LUXURY compared to how many live every day

[Romulox]

36. Nothing to see here folks. Clevelanders should feel LUCKY to have anything at all!

:sarcasm:

:puke:

[democrat2thecore]

39. Americans are spoiled and can't see the RELATIVE luxury around them -nt

[Romulox]

40. In other words, "Let them eat cake!" nt

[Quantess]

41. Oh, we're spoiled, are we?

I suppose we are a nation of whiners to you.

Does it bother you that the USA is in decline? Or, will you be happy when we sink to third-world standards?

[democrat2thecore]

46. You all missed my point....completely...probably my own fault

I am a volunteer for Doctors Without Borders (though I'm NOT a doctor) and see pain and suffering and horrible conditions that would make Cleveland look like Beverly Hills to those people. I was actually offended that anybody would think any of our cities are "not fit" for anybody to live in.

Yes, as a socialist, I firmly believe that the state of our cities needs immediate attention and infrastructure rebuilt on and on. I was only saying that everything is relative. It sounded snobby to say that Cleveland (or wherever) was not fit to live in. Especially, relative to the places I have visited and seen up-close.

Sorry for the confusion. My heart was in the right place, but obviously my brain wasn't.

[Quantess]

47. Oh, no problem. Your post #33 probably should have been a reply to post #2

Then we would have understood your point sooner.
:hi:
I take it all back.

[Celeborn Skywalker]

50. Wow, that's insane.

I can't believe houses can fall that low.