One innovative answer to Detroit's abandoned homes epidemic, the Detroit Land Bank, will sell a collection of Russell Woods homes tomorrow in an online auction. The Land Bank began in 2014, with auctions of city-owned homes. Bids start at $1000, and the program's first auctioned home, an East English Village cottage, just sold for its $86K asking price. The seller, Clint Jeffery Bowen, paid $10.5K at auction and spent $35K on the remodel, yielding a pretty outstanding rate of return. One of tomorrow's auction homes, a 1926 duplex on Cortland Street, seems to have enormous potential, both from a design standpoint and also where renting the units or flipping the property are concerned.
Land Bank homes are generally pretty bare bones, and this duplex is no exception. According to its inspection report, the place needs sheetrock and drywall. It needs refinished floors—and floor joists for that matter. It needs extensive plumbing and electric repairs and landscaping. Also, gutters, downspouts, door knobs and new stairs. This place will cost a lot upfront, but given the neighborhood's rental market and the potential this place has (fireplaces, huge windows, charming exterior, large yard, garage), it could work well as a flip or bring in income for years with the right tenants in place.
Like the Cortland property, the program itself has some serious catches. While the program came close to its goal of selling 400 homes during its first year, the poor housing market and problems with financing shut down dozens of the deals, leaving questions about the program's future. Remodeling is needed--and not just for the homes.
·Rehabbed Land Bank House wants $86.5K [Curbed Detroit]
·4852 Cortland [Building Detroit]
·Inspection Report for 4852 Cortland [Building Detroit]
·Russell Woods Duplex for Rent [Hotpads]
·Detroit Home Auction Program Falters [Detroit News]