IamA realtor that specialized in selling dilapidated homes in Detroit for less than you would pay for a car. I have kicked down doors and shooed away squatters during showings and much more. AMA.

What will have I to do if I want to make my crack house, a crack home?

Sell all your possessions for a rock but keep the welcome mat.

How the hell do I buy a home for a dollar?

Contact a realtor that is familiar with Detroit and find one that is available for a dollar. There are plenty out there. Lots of caviats though.

You will likely have about 1500 in closing costs (the title company and all those involved with the closing still have to get paid), potentially have to pay back taxes and a water bill, and have huge costs getting it up to code.

and have huge costs getting it up to code

How much are we talking here?

10 - 15k for a normal person. Most of the investors that do this do a lot of the work themselves or hire reallly cheap labor to get it done for much less though.

It varies, you get diamonds in the rough sometimes that just need carpet, paint, plumbing.

Thanks for the response. Whats the craziest thing youve seen goin on in a home youve purchased?

Lots of stuff really.. Hard core drug dealers slangin right out in front of the home, squatters, saved a few neglected dogs, etc..

huge costs getting it up to code.

Does the city crackdown on fines for that? Are you responsible for past owner's fines? If the city ever gets too aggressive about collecting, can you just sell the house to someone else for $100?

They dont really fine you for the MOST part. They just say that you cannot occupy the home until the inspection is satisfied. In most scenarios the seller is responsible for making sure all past fines/taxes have been paid but there are times when the buyer willingly agrees to pay for such things.

And I always said.. If there is one person willing to buy a house for some amount, there is another person. you just have to find them.

Can I paint a mural on one of your houses through a Non-profit community service program in detroit? I would enjoy that very much.

I am out of the business now but that would be awesome if I could hook you up with the right people to make that happen. Please PM your info if you are serious and I will see what I can do.

Why did you leave the business? What do you do now? Are you still in Detroit?

I left because of shady people and got sick of sales. I'm in IT now.. And yes still in the area.

Have you ever been attacked by a squatter?

No. I had one lock themselves in a room and not want to come out though. I had to kick down the door and go in with my gun pulled to get them outta there. Kinda scary tbh but they are mostly harmless.

Edit: just want to clear up that I did not have my gun out and pointing.. It was holstered.. In retrospect it was a mistake to break in the door I should have called the police but this is why I'm out of the biz. My apologies on the poor use of terminology.. I was not in the habit of pointing guns at people and sorry if I made that impression.

Lafayette or American?

Lafayette dude of course.

why would anyone buy these homes?

There are investors that have a presence down there that can succeed in renting these homes out for huge profits. They are street wise and have a crew that goes around collecting rent.

And by "crew" you mean? Lol. (Nervous laughter.)

haha.. Nothing too menacing. But you have to show that you mean business or you would never get your rent. Just a couple guys that would knock on doors at the beginning of the month for rent. I never heard of them having to do anything more than just ask for it.

When I lived in Baltimore, I thought about buying one of the burnt-out brick shells listed on HUD for around $20,000, and rolling in some money in a 203k to repair it. They were all 2 or 3 story buildings, so I figured I could live on one floor and rent the others out and get equity for free from renters.

The one thing that gave me pause was that nobody else had done this with these homes. Is there a reason? The only thing I figured was that many of them were not in prime areas in the city, and so would not always fetch a profitable rent (which I didn't particularly care about).

I'm still thinking about doing this if I move to a large city after I graduate, I'd like to hear your thoughts.

The problem is actually collecting the rent. In theory you could make money, but good luck getting paid every month. Unless as a stated in another post, you are someone with a presence down there.

You mean a physical presence? I would likely try to live out of the home if I bought one, and would try to keep the mortgage such that I could pay for it myself without any tenants at all if need be.

I probably would avoid buying a home and trying to manage it from elsewhere. At that point, I'd probably contract out the management to a local company, which is very popular in my current college town.

Where I live, one of the best ways for a land lord to get money is through Section 8. You end up with some sketchy people, but you also have a guaranteed portion of rent every month.

The force is strong in this one.

Yes they have offices down there and have spent a long time building relationships with the people as well.. Everyone in their neighborhood knows them etc..

why is rent so hard to collect? Is everyone jobless?

People are shady and jobless. Makes for a difficult rent collection.

And I assume that frequently their number one priority when they get money is not paying the rent.

that would be a fairly accurate assumption :)

What's the worst place you've succeeded in selling?

I would say the worst is a place that came in a package deal. It was bought by an investor with about 12 other homes for around 40k. When I went upstairs into the attic bedroom there was a space heater running, like 6 buckets of rotten fried chicken, and a piss/shit bucket.. I puked from the smell and ran out.

The sad part is someone had been recently sleeping in there.. You could tell it was hours ago probably.

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I would say the area over by Van Dyke and 94ish is probably the roughest I have had to deal with. It is a desert of there. Also pockets of neighborhoods of 6 and Woodward. If I had to buy a house in Detroit it would probably be in the Northwest side.

Yes a lot of investors dont know what they are doing. A lot of the guys I sold those package deals end up taking advantage of those guys and flipping houses at "wholesale" to them.

It is a big part of why I got out of the business. I found it difficult working in an environment with so much shady stuff going on all the time.

Has anyone done the financial analysis of destroying whole swaths of the desolation and returning it to farm land or just reverting it to a natural landscape and excising it from the city?

Yes.. There actually is a program that has been approved by the mayor and city council to tear down entire neighborhoods to shrink the cost of city services. The difficult part of this is evicting people that own their home and have lived their for years. They don;t want to leave believe it or not.

Wait- if they own it why should they be forced to leave? Is the city offering to relocate them or something?

The plan is to relocate them close to the city. They would be given x amount of dollars as an allowance to do so or something. I dont know all the details.

Is it really as bad in Detroit as people say it is? The way I've seen Reddit describe it seems ridiculous.

Like any big city there are parts of it that are very rough. More of those parts exist in Detroit than other big cities though. The suburbs and downtown provide a fantastic lifestyle for the money. I myself live in a safe neighborhood 3 bed brick home tree lined street that I bought for 20k. Wouldnt be possible anywhere else.

Ever found a meth lab/stockpile of guns/dead body?

what was a former meth lab, yes

guns/bodies, no! thank god.

The craziest thing is probably about a pound of gonja I found in the freezer of a basement refridgerator. I just left it there.

Were you worried they were watching from a distance and would come after you if you took it or you just didn't want to risk anything

Basically. Just leave well enough alone. I really dont want to get into the business of selling drugs anyways and I would never be able to smoke that much haha

It was most likely reggo's man you don't want that shit.

Tru that

How the heck does commission work on a house being sold for $100? Is there a base commission per sale, or is it a straight percentage?

The banks are eager to get rid of the liability. Co missions are generally 1500 plus bonuses up to 3k per realtor

How has it not occurred to people to just burn a few abandoned houses every night to kickstart de-urbanization?

We have an annual even for this called "Devil's Night"! ;)

Are there some properties that are too gross for you to sell with a clean conscious? To put this in perspective for us, where would properties that had black mold OR bed bugs be in the spectrum of properties?

This is a great question. It is a big part of why I got out of the business. I found it was very easy to sucker people into buying these homes and as the foreclosure market dried up a bit I found that if I wanted to continue making good money I would have to spin the truth to sell.

In my opinion there are to many liabilities and gotchas involved with buying these homes to make it worth it.

I have sold houses with insects and/or covered with black mold. The investors are aware of this up front and take it into consideration when making an offer. If I knew about any of this stuff or thought there might be a chance of it, I would always make sure my better knew exactly what they were getting into.

There are realtors that make 400k a year doing this and tbh the only reason I did not is because I am too honest.

this is a great AMA. So lets say I buy this house for $5000 - would I need to get it up to code if it were for myself? And the back taxes would be included on this house?

The city is going to do an inspection on the home and tell you what needs to be done. The inspectors are generally less rigorous on owner occupants than investors but there is no guarantee. You would have to fix plumbing, leaky roofs, broken gutters, big cracks in drive ways. Think anyhting that would make the house unsafe.

When we sold our last house, our realtor decided to just leave me a cell phone message, which I didn't return within a few hours, and she decided that was okay before bringing clients into my home. The husband and I were doing some business over a few bottles of booze.

Chaos ensued. There was much frantic blanket grabbing and shouting before we got things sorted out. In our defense, we did undercut her normal percentage, but still... it was at the cost of our dignity.

So, have you ever shamelessly marched unsuspecting home buyers through a property that you weren't 100% sure was ready to be seen?

No that is just stupid. Up front you agree on when and how you are allowed to show the house. If the clients say that they must confirm. You make sure they confirm.

Is it legal to evict squatters without a court order?

There are gray areas between "evicting" and asking someone to leave.

Are there any good schools that are zoned for these houses? Which zip codes do they fall under?

No. The Detroit Public Schools are probably the worst in the country. There are some VERY nice neighborhoods in these school districts though, but everyone sends their kids to private schools.

Do you make a lot of money doing what you're doing?

Is this your own business or are you working for a company?

Have you ever considered buying a house at this price and just fixing it up and keeping it?

I no longer do that because the job really wears on you and I wanted to do something more rewarding (I am in IT now). When I did though I made 80k in my last year and had to take a huge pay cut to make a career change.

I worked for a real estate company. The broker had good relationships with a lot of the banks that own most of these homes so we got a ton of listings. I acted mostly as a buyers agent, working for investors to find homes worth buying.

I did this for the house that I currently live in. It is just outside of Detroit but I picked it up for 20k. I have a family and the school districts in Detroit would deter me from wanting to do it down there. I would stay away from renting out homes down there because it is difficult to collect rent unless you know what you are doing.

At some stage do you think artists and other people of that kind will move in, slowly gentrifying areas of Detroit? Or does it require an influx of immigrants first? This is the pattern I've noticed in most places. Cheap homes ---> immigrants who provide basic services (e.g. supermarkets, cafes) ---> artists, hipsters, etc who make it trendy ---> prices go up + gentrification.

I really really hope so. It has happened in some areas such as corktown but hasnt really spread yet. This has done wonders in Pittsburgh.

What is the average deal like? Are most homes $1? Or do the usually go for more? Do people buy houses and just scrap them for the copper?

The average deal is around 5k.. The homes for $1 would be in some really bad areas or make the buyers pay taxes for the most part.

The copper is always gone by the time the house is sold. There were a lot of investors that bought up these houses and didnt appear to do anything with them, though I have no idea why.

Are potential buyers told beforehand of the amount of back taxes owed? And are these back taxes required to be paid before the buyer can actually "own" the home?

I have seen video and pictures of these houses. The unforunate thing is that most of these houses are older houses that have so much character. It's a shame that entire neighborhoods of these once beautiful homes are in a state off such disrepair.

In order to transfer the title of the home the city will require taxes be brought up to date. Everything is disclosed up front and most of the time the seller is responsible for those. However sometimes the seller is unwilling to pay them which will result in having to find a buyer that will pay them or the house sits abandoned forever.

Whats a good neighborhood to buy into?

That is, low in value now, but improving.

I would say any one of the suburban cities close to detroit where you can find a house for under 40k excluding south Warren.

What's wrong with southern Warren ? We bought a house (bank owned and in move in condition) for my wifes daughter for 13k. large lot, newer 2 car garage, shed, huge deck, fenced yard, 4 bedroom 2 story with appliances and newer furnace/CA. Definitely not ghetto (9 and hoover)

Just not my cup of tea. Nothing personal.

Do you think these neighbourhoods could be turned around?

Also, if they are that cheap, have you considered encouraging a setup homeless shelter to HELP the squatters?

There are homeless shelters available but many of them do not want to use them because they dont want to get preached at or whatever. I am sure they fill up from time to time as well but I have never really thought about it much.

The neighborhood probably cannot be turned around to be honest. MAYBE if the city would institute some program that waived back taxes so some of these vacancies could be filled. But it wont happen because they look at that as lost revenue.

Do you ever sell to anyone other than investors?

Yes I did actually sell to a lot of people that planned to occupy the homes. These were definitely my favorite deals. Some of the neighborhoods are not all that bad to be honest!

My boyfriend and I are currently in school (Ann Arbor) and were thinking of purchasing property after he's done with grad school next year. This doesn't sound even remotely wise after reading through this AMA. We figured Detroit will rebound eventually, and when it does owning property that we purchased for the price of dirt would be a good thing! Thanks for all the info, we'll definitely be reconsidering this option.

I would never say its a bad idea to purchase property. And I have stated in other comments on the page that there are some very nice neighborhoods in Detroit.. However I would not trust the PSL. If you are comfortable with sending kids to private school there are a lot of really great neighborhoods in Detroit.

Who owns the abaondoned homes? Why do you get to kick people out?

Banks for the most part. And its not like I "got" to kick people out. It was more of, go to the house and change the locks etc and in the process I would be like gtfo here.

Has your job made you racist?

No actually it has improved my view of black people in Detroit because I have a better understanding of the blight that some of them grow up with. If I had come from such conditions who knows what type of person I would be. I am much more tolerant than I used to be.

Also when you are a white person driving a decent car in these areas you expect to be accosted, robbed, etc.. However, I found that I was left alone and people were actually friendly. It really changed my view.