The city of Detroit desperately needs an investment of human capital, in fact things are so bad that they are selling homes for $1000. Of course a $1000 home is a sure sign that the home is going to need more than the purchase price to make it work but I see this as an incredible opportunity for those who are willing to tackle the whole challenge. Let’s have a look at what that whole challenge is.
The first part of the challenge is cost. For $1000 you are bidding on a home that doesn’t meet the city code. The purchase agreement stipulates that the home must be up to code and occupied within 6 months. Each house will have its own list of things needed to meet code but considering that these houses are all under 1500 square feet, having looked at the specific descriptions of a few of the houses, and based on my own experience with the cost of various projects around my house it seems that any of the houses could be brought up to code at a cost of $30,000 or less (not including the purchase price). Of course if you are interested in doing more than simply bringing the house up to code the costs of refurbishing the property could go much higher – depending entirely upon what you are trying to accomplish.
The second part of the challenge is occupancy. These homes range in size from 1100 to 1400 square feet and they all seem to have 3 bedrooms so unless you are coming from Manhattan they won’t feel spacious. In addition, Detroit has an unemployment rate of about 16% so anyone moving in shouldn’t expect to be finding a job there. They either need to be employed locally already, be willing to commute, have skills that allow them to work from home, or the best case scenario would be someone with a business who can either hire people in the area or bring in other people to work for them and live nearby.
This is an opportunity in Michigan. Only Michigan residents and organizations authorized to do business in Michigan are eligible to buy these properties but for those who qualify this is the modern equivalent of a land run. There is no guarantee of success but the low cost means that anyone who is willing to undertake the challenge has the opportunity to establish themselves. If it works, Detroit could revive its economy by attracting ambitious people with limited capital. This is the same Detroit that Angie Duke sings about in The Happiest Millionaire.