Do you remember when we told you that a slew of deserted, deteriorating Detroit homes would be up for sale — starting from only $1,000 — under Mayor Mike Duggan’s new “Building Detroit” plan? Well, the first home was auctioned off and sold for a little more than $34,000, according to CNN Money.
The sale took place last Monday for a three-bedroom, 1,400 square foot house in Detroit’s East English Village. The home did need a few upgrades – a new furnace and a new water heater. Other than that, the colonial was in decent shape. All in all, the auction drew in 88 bids; the winner put down $34,100 for the 4148 Bishop Street property.
Since then, the Detroit Land Bank Authority has auctioned off dozens more vacant homes. The second home, which needed repairs for a new roof, gutter, furnace, and heater, was sold for $30,100. The third home was sold for $42,000 — the cottage-style house only needed roof and window repairs.
As we’ve mentioned last month, there is certainly a catch to purchasing these dilapidated Detroit dwellings. You must come up with a 10 percent down payment within 72 hours and make a full payment in 60 days if the purchase is less than 20,000, 90 days if it’s higher. Also, “winning bidders in the Building Detroit auction must promise to fix the homes to make them up to code,” MN wrote. The Land Bank admits that winners may spend more money fixing-up these properties than purchasing them in the first place.
On top of that, someone has to live in it within just six months.
The city hopes to attract residents and tenants while keeping investors and opportunists at bay. In fact, the social media initiative for the Building Detroit plan uses the hashtag #NeighborsWanted.
“We are not interested in encouraging or doing a buy-and-hold type thing. If you buy a property, you have to bring it up to code, and you have a finite amount of time to do that, and if you don’t do that, the property will revert to us,” said Richard Wiener, the land bank’s executive director. “What we’re interested in is causing properties to be rehabbed.”
In the coming weeks, Detroit plans to auction off 11 more homes — a drop in the bucket in comparison to the 16,000 homes the city has seized due to foreclosures. So far, the auctions are a hit “When it hosted a circuit of open houses for the first batch on auction, 1,049 people turned up to look around,” The Washington Post said.
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