How low can you pay for a home in your market? Can you get one for $30,000? $10,000? How about one dollar? Investors who live in the Rust Belt or other areas that were overbuilt and were slammed by the housing bust can find some incredible buys right now.
A quick search of Realtor.com found more than 150 homes, condos and multi-unit buildings in the Chicago area for $10,000 or less. Minneapolis has 129 dwellings for between $7,000 and $30,000. In Detroit a whopping 3,444 listings are under $25,000, some as low as $40. Cleveland has some charming places for under $20,000-about 520 in all listed for under that amount starting with an auction bid price of $1.
Common characteristics are that most of these homes are bank owned. The banks tend to be more anxious to get these properties off their books than they are to make a dime on the assets. Because of the low, low prices and the need for speed, many are all-cash deals.
Most of these houses need significant rehab work. Many are burn-outs that require gutting. Often liens, real estate commissions, and all required permits and fees must be paid by the buyer. Buyers must do all the due diligence to get surveys, inspections, and other work done before signing anything permanent. Homes in this price range are always “as is.”
Local factors might come into play with these sales. For example, most of the 33 listings between $10,000 and $30,000 in the Cedar Rapids, IA area happen to be located in areas that were flooded recently. The house might be in a “tear down” area, and you would have to find out how quickly the city was going to finish their work on the area. With these sales, the policy is “let the buyer beware.”
In Cape Coral, FL many of the properties listed in the $20,000 to $39,000 level are located in the Northeast quadrant, an area due to be assessed $25,000 for city water and sewer services soon. Many of the low price homes in this community do not need a lot of TLC, but whether the assessment has been paid or not is always an issue in determining the real cost of owning a home in the northern half of Cape Coral.
Several billion dollars were included in the Housing and Economic Recovery Act of 2008 and the American Recovery and Reinvestment Act of 2009 to be spent on rehabbing blighted neighborhoods, focusing especially on areas hardest hit by the foreclosure crisis. More the $4 billion of the Neighborhood Stabilization portion the bill in 2008 have already been distributed to the cities that were hit the hardest.
Local Investors can’t expect to receive individual grants from these programs, except possibly from other portions of the American Recovery and Reinvestment Act that related to making energy efficiency upgrades to low income housing. Investors may benefit indirectly if they accept Section 8 clients as tenants. More money under these emergency programs will be available in order to get more individuals below the poverty level into decent housing through Section 8.
Individual cities or non-profits may offer grants to Investors for the purpose of buying foreclosed or poor condition housing and rehabilitating this housing. Check your local Housing Authority for options available in your area.
Want to find out more about property investing? Then visit master real estate investor Bob Massey’s site and sign up to get a free copy of his eBook and his receive his email news and advice column that will teach you how to invest in real estate.
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