A Shocking Look into Cheap Real Estate: The $12,900 House

today we're coming to you from Detroit Michigan with Graham Steffen and we're going to be comparing houses in multiple different price ranges we've been told a lot about Detroit we have no idea what to expect other than this gimbal sliding away in weird angles and so we have an itinerary of about five houses that we're gonna see anywhere between $2,500 maybe $5,000 all the way up to $200,000 so let's go ahead and get into the comparison and see what we find I'm excited what about you yeah and really quick make sure link down below 18% off the real estate investing course valid for the next 24 hours only so make sure to check that out in the description very happy members coupon code GP Stephan waiting for our agent and we're gonna check out this first house a two hundred fifteen thousand dollar house this is gonna be the high end of our list we're gonna work our way down from there see Detroit once one of the most dangerous cities in the country has suffered from deindustrialization as manufacturing spreads overseas across the border to Mexico and automation becomes common the last recession was particularly hard leaving blocks upon blocks completely empty boarded up houses everywhere you'd look but this isn't the entire story the story of Detroit goes much deeper and there's a lot of optimism to be had for the future lessons will be learned for anyone interested in investing in real estate hey hey what's up Graham Matt yeah thank you the more questions we asked the more we learned do you have any worries of like people breaking in or squatting in the house like this absolutely absolutely later the alarm system on this house but on the back door from the side doors they actually have these wedges built in to help prevent them again from getting kicked in Wow nor do you see on a lot of Detroit properties lockbox on the front or signage in the in the front because we don't want to advertise that it's possibly vacant or upper sale exactly they don't want people to see it's empty now while inside the house we couldn't help but wonder about crime and that's because well we happened to be in an uber the night before and when we asked what areas should we stay out of he responded you're in it we were on our way to McDonald's hungry after a flight and may have been 1:00 a.m. but we asked at the same time was there anything we could do to be safer and the uber driver responded pray see the uber driver also told us Detroit's Detroit the burbs or suburbs are different but once you cross eight mile at night you got a drive like this and then he hunched his shoulders up leaned in closer to the steering wheel and slowly looked left and right as he made sure the doors were locked why would they keep a home empty for this long they started rehabbing and probably cleaning it up more than likely would belong to a Detroit land bank or yeah sitting vacant they throw on a couple of things to kind of clean it up and just get off from work I'm working that they bought this for a couple grand off the land bank because they were just sitting there vacant paid up the property taxes and water a lot of times on these properties there's like sometimes $10,000 back taxes and property one thing that's so cool about like these old-school stairs is this salad oh you mean you can't really buy this anymore nothing's naturally this thick and over here there's a lot of people that love to kind of come back and revitalize this particular like neighborhood 1920's style yeah it's pretty neat Wow and so tell me about this neighborhood neighborhood wise Boston Edison is a very Street by street in particular neighborhood I couldn't help but wonder why were so many of the garages destroyed in the area they would take care of their home because that's where they live they're not living in the garage the garage went first they're gonna replace any roof was gonna be on their home right let the garage go on forget right yeah a lot of garages were lost over kind of that transition when it got really rough and why wouldn't people convert these garages into accessory dwelling units or other livable houses I wouldn't say I've seen it that's possible but it's it's less common it's probably rare cheaper for somebody to go buy a cheaper house yeah oh yeah no the conversion wouldn't be that wouldn't make sense next door is where things got a bit more interesting see we had also asked our uber driver about thousand dollar houses and his response was well there's a reason they're a thousand dollars the door just closed no no it's oh is this what they called an open house uh-huh I think that's probably oh my god I think we gotta I'm gonna tore that burned up top like that how can we look at this up and see what this is it's long scary-looking man dude this one to this one oh my god the camera just gets cut whoa I guess maybe we could have gone through the driveway now while in this backyard we even saw a powerline on the ground with no tape no cones no red flags nothing and that reminded me of asking the ubirr driver is it safe to go out and he responded and said look rent a car drive by if you see something suspicious you keep moving then we went to Highland Park this is actually a city within Detroit but Detroit technically doesn't incorporate Highland Park because the crime is so high Detroit's average crime rate would skyrocket if they absorbed Highland Park so technically we were in a bubble with in Detroit now I did still see hope because the entirety of my trip I spent looking for hope or we're going into Highland Park which we were told to only drive through right so on the last one of what happened was that we went to the home next door and a white side I don't know boarded up but in a good area but there was for sure someone in there like there was someone in the house now I'm starting to realize why so many people were warning us about like just don't go to these certain neighborhoods I've never been exposed to any of this personally [Music] you find one year bodies are use warrant the landscape contractors pretty trait he used to be every week bill literally doesn't start guru lawn mowing on boom-boom Oh what was that we got another one Phil he caught like seriously did you call the Detroit Police Department you ask them like how often biased are not the field we aren't we're I'd say I'm not desirable the tree we're getting to like if it's scale one to ten ten being like okay but like one thing oh god I'm dying to get out of my car we're probably at like a like five or six right now so it's still tolerable to me but that no I don't want to take you guys to a three I don't think that's to the three stay in your car this is a five why why is it no insurance on these houses these flames are you can see the bedrooms Wow that's how to the street versus this side what how is that that's watch man it looks like just fire so what how why are there fire is this homes really gonna be interesting we're at the 12 nine range okay we probably could get this for under ten when you say 12 nine we're not talking twelve point nine million no we're not talking twelve point nine that's about like 129 we're talking $12,900 why it's so cheap and how much are all the other homes here it looks like you have a really nice home across the street there's a couple that are nice on the street actually well I think if we turn the camera toward the house we're gonna get an inkling of an idea so we're gonna need probably a new roof I'm sure because of the damage and the squirrels that are probably in the home probably gonna need some pest control we'll probably have to do some major repair I'm sure there's water damage throughout the home there's no windows on this one so I know water is getting in there assume you floor damage in general yeah and you should definitely do a lot of pausing on this one I've noticed this is very common to see like burn burn burn burn my there's a lot of reasons one in one big reason it's idiots idiots exist there's you see you see that you see a lot of drug stuff going on aside from that not so much anymore but there used to be a lot of fire fraud insurance fraud for fire here it's not usually that in this area it's more just ignorant homing homeowners or it's just some it's also just vandals just straight-up arson nice yeah right now we're standing outside of a twelve thousand nine hundred dollar house in Detroit there's a burned down house over here yet on the other side of the street all the houses look very typical and normal that probably sell for anywhere between a hundred to one hundred fifty thousand dollars this though twelve thousand nine hundred dollars so I'm gonna probably be a little more trepidatious with my footing here and throughout this house every don't feel right step back hello hello realtor remember we talked about the ceilings I've been stuccoed it's all stripped I mean wow the knob-and-tube is left and what is that that's all this wasn't yeah there's no copy or correct that's the remnants of a pocket door right there and then this how often is it that someone goes and sees this in person why is this on the market how are they yeah and for how long has this been available I'm gonna tell you right now yeah it's actually quite interesting this is porn this is what it's hang up for good no okay four hours of continuous play why I have a nail in my shoe oh yeah yeah what the hell careful dude I'm cut this is probably one of my favorite finds ever euro leisure time dig it look at this this is this when people ask well what's lath and plaster come here where you can see the cut off plan look this was the kitchen see this is the linoleum in the kitchen here's the kitchen sink the drain for the kitchen sink the water supply probably came in over here water supplies gone the gas lines right here they left the crappy plumbing that nobody wants and it's it's totally clogged probably from the upstairs coming down Kevin I dare you to go downstairs first for us going down make sure to press the like button and watch an app like us oh dude this is scary Shh man you go first okay yeah okay I'm scared to get out here do you first man did you walk into a spider web I walked into plenty of those yeah oh that's an old furnace horns beard and lots of labor it's actually not even that bad he said yeah oh look here's the old uh oh they actually of a breaker panel and they left copper it was quite bizarre that the stories of the uber driver kept echoing back but he also said if you're going to invest here you buy that thousand dollar house don't spend more than $20,000 hope that you can rent it out for six to eight hundred dollars but you have to balance the tenants affording it without you having to evict them most of these houses are gutted the people take everything Detroit's Detroit yeah if somebody bought this for twelve five how much would they have to put in to fix this thing up basic because we're wearing we don't want to over and prove but I mean if you spend a hundred on this your metal it just needs to month what I mean it's every wall needs to be stripped and then it's just kind of like when you open up I can't worry about it yeah it's a can of worms cut into an oven there's so many layers because that just shows you what we can see we've always pulled off the bad plaster well you know this house I mean honestly the the ARV is not there to support this one oh this is one of those foreclosure turns this home has been winterized water has been turned off well there's no plumbing left what I would expect from what I'm seeing is they probably started to work on it with the intent to flip it and they're just like what are we doing because when you see all that drywall ripped off some of that fresh electrical they usually apply somebody started but I think they've quickly realized the scope of work was beyond her they needed power to start so they put in the panel they got power service hooked up so now they had power and tools in here they start taking off you know wall boards and they realized oh my gosh that we're in over our heads just walk away from it so it goes right back into foreclosure what would it take to rebuild this money-wise couple hundred Erin yeah easily probably 250 but it's $100,000 neighborhood yeah you gets a loss and right now you can still negotiate enough where you could totally get another property probably near this block for you and 50 and that's actually in decent shape as long as the bones are good it's all cosmetic let's say you put in another 20 30 sup for 120 are you at it's not bad that's true they tried to sell this house themselves probably when they were flipping it and they couldn't do it and you can see the neighbor has actually patched their roof with a different color of product yeah let's go good dude imagine an overnight challenge yet I mean I'm not sure what I was expecting to be honest had expectations I did have any air I think expected to be is a spooky no I guess yeah I mean it's always a recent wider search Eve and it's still on the market and still the mind no one has a body you know what the agent needs to go in for a price reduction probably under ten nine nine nine nine nine and the more people you have that are meticulous about their lawns it can create that psychology hey do you need to do this too because when you're that obvious person that's kind of just the outlier usually your neighbors will even say something so if you see like six or seven Long's in row one guy starting to go bad they're gonna call it out they're gonna call the city they're gonna help maintain your property then we came to this area where the vacant houses that were for sale had these Titanic style doors it looked like they were trying to keep water from from getting in like a flood in the Titanic but it was really just to keep squatters out of the house and we now understood that there was the level of not having a for sale sign and covering up the windows and then there was this level here's the front door they took the front door off the hinges to put this in how much is this 110 la wow these are the security doors that's not going anywhere they take the door off so they'll reinstall it at the close of escrow because they want to fortify the house wallets for sale I mean doesn't that signal bad things to potential buyers well I think if you saw this in LA would you buy the place no the thing is this is normal if this is the area you want to be in it is the norm at the end of the day even in some of the nicer spots in Detroit play this would be a smart move but is it visually absolutely not [Music] you know some old-school moles flight it's not bad all this white mole Oh discriminating molds now now they put the address on the water meter are people stealing is anything that's got copper on it anything that could be resold to other contractors yeah in fact due to the high level of the theft to push our new GPS trackers and unique like hidden inscriptions on certain parts of the fergus's oh look this is this is your original security door which they replace with the Titanic security doors jeez I totally see why I would spend 100 what ten here I would rather negotiate like this yeah down maybe fifteen twenty right now just cuz it's been a little drier with the market the market over here but it's house is great it's actually a great little house but it's just still just on the outskirts of that Detroit spot that you really want to be in it's possible though you could room hack this thing they get like 4500 bucks a room at that point it's outside who's renting it for downtown Quicken Loans employees you own properties here and what are you buying for well mostly in the real estate agent in the 50 it's now worth 123 years ago most of most of my properties are worth almost 160 now 160 did you buy them as pictures I thought they were okay mostly I'd say most of you like 510 K oh that's it so your time please you bought 450 and your values are tripled since 2016 I just want to be very clear I'm not mad about it no but so eight-mile is though a big dividing factor between generally the the suburbs are gonna be worth more up here you go further west though and be right back to happen later Holmes okay now this is a remodeled house in Hazel Park which is just above 8 mile and it's close to Detroit it's got a new roof new side a new furnace new plumbing new electrical so it seems to have less concerning aspects regarding not only the condition but also overall the location so I'll hardwood floors yeah please cold ceilings here this is beautiful it's a it's a great home i'm this thing's here to stay that's what's great about this home you can't go wrong there's really nothing for you to do you buy it just keep the yard maintained and that's pretty much that's gonna be a major improvement you know I'm noticing there's no address written on like the furnace or the water heater in this area pretty observant yeah it's not as big of a deal over here no you know it's amazing what we drove what ten minutes north maybe and it's a big difference over does it happen yeah you could probably get 12 to 13 hundred right on this one now what are the odds that an area you know what happened in this area that tripling of value could happen where we were that twelve thousand nine dollar house um odds like is that ha see we're gonna you know come up I do believe it's so coming up I really do it's come up a lot in boston-edison there's there's a few streets that are clearly like the moneymaker seriously that is the play if you're gonna bet on that you can bet they're blindfolded hmm and you can go maybe one block off with that second block that you just jumped up like fifty percent volatility you go one more block after that after that you're like wow you're gambling heavy now it's pretty much you just hoping so one block can make two times a difference so you're talking guaranteed ROI verse roulette roulette now relative to what we had seen Graham and I were crunching numbers to see what this investment would be like but it was at that point that Matt's transparency even in this location really ended that idea quickly and it seemed to only be because of our proximity to eight mile what do you think is the lowest so you can offer on this easy to sell a house like this sell a house like this easy how location is always a banger he's this house is a little bit closer to 8 mile in the freeway then I think I would have probably done if I was intending to flip this is when you realize you're going to need more than just one day to analyze the area to be able to make actual investing decisions [Music] what's your Instagram at Nick Saban I see que la FA ve thanks for helping us out no problem this should be pretty interesting I just got a text from another agent here in Detroit and they said I have a client that's willing to film his property he started rehab but not finished he purchased it from auction for around twelve thousand dollars which is kind of like now so we saw and the after repair value will be around ninety to a hundred thousand dollars so we're about three minutes from there now excited to see what we're getting into last stop we went to this flip in progress that was bought for $13,000 and just started renovations let's take a peek at this this is this is much like the other one yeah that we saw for twelve nine look at auction but it was like this everywhere now I see Brewer putting my hand lights up here and I walk in go there will be ten lights it's gonna obviously restore and retail this fireplace it'll get a complete kitchen makeover with granted and new cabinets and all that great stuff I don't know if you guys want to swing around in there there's not much in there right now but the last time I was here there were mushrooms growing through the kitchen floor so a vast improvement oh no worries dogs get up here well this house set vacant I would say for at least three years or so this was one of the properties owned by the city of Detroit and sold on auction you pay the current year's back to it kinda depends because there are a few different ways watch your step please a few different ways to buy in on that sometimes the city themselves they will renovate the houses and sell them that way sometimes they're the thousand other auctions that you're referring to and then also these types of options where the price obviously went up past a thousand dollars but I beat up in mine over this one I think went for around a little under thirteen thousand as well so he's had this for three months what's the ETA and another couple months well he told me originally he would be done in in pub forty days I think he's kind of put this on the back burner to finish up some smaller ones and he's gonna have his rentals but it looks like they're jumping back into this one this month so hopefully by end of July I'm hoping our people rebuilding here is it mostly just light cosmetic renovation and try to get it livable again mostly renovation what do you think this would rent for what it's done it will probably ran about a thousand dollars a month thousand bucks okay so all-in even if he kept it as a rental that's not bad so you're really seeing these hotspots of development throughout Detroit yes and I think a lot of people get confused about buying here because unfortunately a lot of our city is like that where we could be right here at like half nine dollar house and then I could take you you know quarter-mile and they'll be like one house on a block you know and a lot of people they don't really know what to do with that you know and it's very hard to explain for someone who has not been here who has not seen it but you know we try our best to explain it you know as best we can Wow now folks thank you so much for making it to the end of this video as a special bonus I'm just rolling some clips in the background of the meetup that Gramps Stefan and I had after we went on the home tour we had been asked a lot at the home tour where would we invest what would we do and after our experience we have to say we're very optimistic with Detroit the downtown Detroit area was revitalizing we were out and felt safe at 1 and 2 a.m. by casinos they had enjoyed the transit activities the parks everything overall not only felt clean but felt safe in certain areas and so it seemed to be that even though Detroit has been on a long road of decline we believe Detroit has an upward slope of progression coming to it oh yes follow me on instagram alicia al i CIA sales the city i'm with downtown realty we are based in downtown Detroit at 500 Griswold and we do service pretty much everything Metro Detroit awesome thank you that was awesome thank you so much thank you for having me guys thank you so much for showing us these homes I tell us a little bit about your company who you are and tell the world thank you it was great going out with you guys as well my name is Matt McCall Stillman I'm with wood Woodard square Realty go by wsr we are a real estate brokerage out here we started off mostly on the investment side and currently we're kind of working a lot of retail as well mostly for our flippers and builders and this is Ethan harms yeah that pretty much covers it thank you guys so much yeah yeah we're really glad to I have a chance to meet you guys and we hope you guys do more investing out this way as well thank you and then like and subscribe like and subscribe [Music] [Applause] [Music] [Applause] [Music]

Channel: Meet Kevin

Views: 1,036,772

Rating: 4.8441539 out of 5

Keywords: real estate, real estate investing, investing in real estate, beginner real estate, cheap real estate, house, shocked

Id: tEgpfQFpQUM

Length: 27min 8sec (1628 seconds)

Published: Mon Jun 17 2019