A Mystery Bidder Offers $3 Million for 6,000 of Detroit's Worst Homes

[Arcachon]

Three million dollars can barely buy a new townhouse in Brooklyn these days, but it could be enough to purchase a bundle of more than 6,000 foreclosures up for auction in Detroit.

The cost of dealing with the many blighted buildings included in the Detroit mega-auction means a $3.2 million bid received last week—roughly the minimum allowable bid of $500 per property—will likely prove too high to turn a profit. “I can’t imagine that you are going to make money on this,” says David Szymanski, chief deputy treasurer of Wayne County, which is selling the properties.

So it’s all the more mysterious that the auction, opened with little fanfare earlier this month, has attracted any bidder at all. Still, at least one unidentified party is willing to pay $3.2 million take control—and responsibility—for scores of dilapidated homes. In fact, winning the bid could cost the lucky winner a small fortune beyond the auction price.

http://www.businessweek.com/articles/2014-10-24/buying-derelict-detroit-mystery-bidder-wants-6-000-foreclosed-homes#p1

[heehee]

Think can make a lot of money over long-term, but the person need to have holding power


Three million dollars can barely buy a new townhouse in Brooklyn these days, but it could be enough to purchase a bundle of more than 6,000 foreclosures up for auction in Detroit.

The cost of dealing with the many blighted buildings included in the Detroit mega-auction means a $3.2 million bid received last week—roughly the minimum allowable bid of $500 per property—will likely prove too high to turn a profit. “I can’t imagine that you are going to make money on this,” says David Szymanski, chief deputy treasurer of Wayne County, which is selling the properties.

So it’s all the more mysterious that the auction, opened with little fanfare earlier this month, has attracted any bidder at all. Still, at least one unidentified party is willing to pay $3.2 million take control—and responsibility—for scores of dilapidated homes. In fact, winning the bid could cost the lucky winner a small fortune beyond the auction price.

http://www.businessweek.com/articles/2014-10-24/buying-derelict-detroit-mystery-bidder-wants-6-000-foreclosed-homes#p1

[Arcachon]

“The idea was that no one would buy it,” Szymanski explains, so they would pass on to the city to handle. A closer look at the so-called blight bundle (PDF) created for the auction makes it clear why that auction is no bargain. The parcel includes roughly 3,000 properties that need to be torn down, plus some 2,000 empty lots, plus about 1,000 homes that are believed to hold some value. Everything is sold as is: The homes may lack furnaces or wiring and they may come with mold, tenants, or both.

To top it off, a condition of the auction requires the buyer to demolish the rundown buildings within six months—something Szymanski estimates will cost about $24 million.

[teddybear]

Wah, so many conditions then difficult loh...........
If buy cheap cheap and can leave it vacant for 20 years or more like what the govt did >30 years ago, can make money lah!


“The idea was that no one would buy it,” Szymanski explains, so they would pass on to the city to handle. A closer look at the so-called blight bundle (PDF) created for the auction makes it clear why that auction is no bargain. The parcel includes roughly 3,000 properties that need to be torn down, plus some 2,000 empty lots, plus about 1,000 homes that are believed to hold some value. Everything is sold as is: The homes may lack furnaces or wiring and they may come with mold, tenants, or both.

To top it off, a condition of the auction requires the buyer to demolish the rundown buildings within six months—something Szymanski estimates will cost about $24 million.