Would you buy a house for a dollar?

[OmnivoreInk]

There are apparently places in Detroit where people can buy a HUD house for a dollar...or at any rate for some ridiculously low sum...

I don't want to get into the real estate game, even if I had the money to do so, but I'm wondering if any entrepreneurs are thinking of getting into this? I know it's somewhat like Vultures Gathering, but if you've got the money, you can pick up some bargains right now, and, if things go well (ie. the right politicians get into office - not Obama!) the housing market might pick up in a few more years and you would finally be able to sell it at a profit...

[GT Bulmer]

Hi, Barbara:

It would be tempting to take advantage of such an opportunity. But prospective investors should think ahead and draw up a plan before doing it.

I would look at:

- the condition of the house: if structurally it is about to crumble into the ground, then all you are buying is the lot. Or if it needs major reconditioning, is the cheap price still worth it?

- the location: is it in a depressed part of town where homes and properties are largely derelict and vacant, and squatting and vandalism are predominant? Will you be able to keep an eye on it to prevent vandalism? It could be a concern unless you are going to move in.

- the purchase requirements: sometimes, the deal is that you HAVE to renovate within a certain period of time, or you HAVE to move in and live there for a period of time.

Just a ew things to think about.

GT

[ideasuniversity]

The first rule in this kind of investment is that you must never invest with money you cannot afford to lose.

[topeyinka]

What I know is that risk is risk be a dollar or hundreds of dollars. What matter is cross checking the genuity of the business.

[Kevin Lee]

Hi, Barbara:

It would be tempting to take advantage of such an opportunity. But prospective investors should think ahead and draw up a plan before doing it.

I would look at:

- the condition of the house: if structurally it is about to crumble into the ground, then all you are buying is the lot. Or if it needs major reconditioning, is the cheap price still worth it?

- the location: is it in a depressed part of town where homes and properties are largely derelict and vacant, and squatting and vandalism are predominant? Will you be able to keep an eye on it to prevent vandalism? It could be a concern unless you are going to move in.

- the purchase requirements: sometimes, the deal is that you HAVE to renovate within a certain period of time, or you HAVE to move in and live there for a period of time.

Just a ew things to think about.

GT

Hi GT,

Another thing to worry about is if the owner of the "$1 house" would be liable for any problems encountered by the tenant(s) living there.

[JimmyDave]

Investors with their long term planing always be looking forward for such cheap investment projects. This is not a bad idea I think. One can take initiative on it and can earn handsome amount by doing small investment.

[GT Bulmer]

Investors with their long term planing always be looking forward for such cheap investment projects. This is not a bad idea I think. One can take initiative on it and can earn handsome amount by doing small investment.

I agree. As long as you check to make sure there are no legal surprises being hidden from you, you can pick up cheap homes, clean them up and flip them for a profit.

My wife and I missed our opportunity last year. Real estate prices in our own community went crazy last year (as did many areas in Canada and particularly Alberta.)

However, we have a daughter and her family in Saskatchewan. In one of the cities we pass through to get to their city, we discovered a neighborhood with five properties for sale, side-by side (three on one side of the street, two on the other side), being sold as a package deal by one buyer.

The homes were small and in need of major renovations, but the rest of the neighborhood was fairly nice. The selling price was low and compared to our little town in Alberta, the prices were bargain basement! An investor's dream!

Our problem was the distance (about 6 hours of straight driving), plus the fact that I am NOT a handyman and have no desire to become one! (I'm a writer, not a carpenter!)

We dragged our heals, undecided, until one day, the five homes were sold and we no longer had to worry about it. And then ... ... ... the housing market in Saskatchewan boomed just like Alberta had been doing!

If we would have purchased those homes, we probably could have sold them for double the price in about eight months without doing any work on them. Oh well. Lesson learned.

GT