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Detroit real estate

Thoughts on buying a few lots? You can pick up places for 5-25k. .1 acre lots with little houses. Seems to be bottomed out. Thoughts?

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what about taxes doe? One problem was many of these properties were super late on appraisals so you end up paying taxes on a property that has depreciated in value.

think i read somewhere a lot of these properties come from city auctions and due to the back taxes no one would ever buy them so they basically waive all historical taxes.

Resi RE in places like this is super dependent on what the got does in the future to rebuild the city basically.

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

it will be very neighborhood dependent as well. some neighborhoods will gentrify, others will crumble. i feel like the only person who has an idea about which neighborhoods are which is the city’s urban planner. become best friends with this person.

i got a buddy. who got elected in city council that owned a construction company. he spent hundreds of thousands to get elected. far more than the other people running. anyawys when he won, he rezoned a bunch of single family dwellings that he bought out. then created apt/condos. they are calling it the revitalization of a city. which is true, but he also made fat cash in the process with his co. 

anyways this was his plan on the get go, and i thought he was ridic. you wanted to get elected to find out abotu the hiddent properties for sale? but after seeing what happened to housing prices in the area and the stuff he constructed. his idea was a goldmine!

not better than bitcoin though. lol

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Nerdyblop wrote:

i got a buddy. who got elected in city council that owned a construction company. he spent hundreds of thousands to get elected. far more than the other people running. anyawys when he won, he rezoned a bunch of single family dwellings that he bought out. then created apt/condos. they are calling it the revitalization of a city. which is true, but he also made fat cash in the process with his co. 

That sounsd overall like a good thing. Good for him.

The consequence of the propagation of second-order simulacra is that, within the affected context, nothing is "real," though those engaged in the illusion are incapable of seeing it

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Read this thread. This guy is making money but it seems like a PITA

http://cornerofberkshireandfairfax.ca/forum/general-discussion/krazy...

This is how high end residential real estate in the NY/NJ/CT suburbs is going to look after the tax bill. Some of those places have like $60k in property taxes. Once high earning residents can’t deduct SALT and move away, these towns will need to further raise taxes to pay their bills. There isn’t going to be a bidder out there for houses with this sort of tax liability, and I wonder where they will clear on the market.

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From what I’ve read there’s just too much inventory in Detroit.  The city is drastically smaller than what it was in its heyday.  Best approach now is to buy up (if you can get it) connected lots and sell back to the city for conversion back to green space.

ohai wrote:

This is how high end residential real estate in the NY/NJ/CT suburbs is going to look after the tax bill. Some of those places have like $60k in property taxes. Once high earning residents can’t deduct SALT and move away, these towns will need to further raise taxes to pay their bills. There isn’t going to be a bidder out there for houses with this sort of tax liability, and I wonder where they will clear on the market.

there are conflicting opinions of how this will impact the NYC market. NJ & CT should get an outflow since there is no real reason to be there, NYC is in question because at the ultra high end there can be some flight, but the trend will continue to get support staff out of NYC (those people arent buying high end condos to begin with) where the bankers/lawyers servicing finance and such will still be housed in NYC due to demand for the jobs & recruiting in those cities and thus demand should still be there for the luxury market. So general market consensus is the ultra high end might get hit, but there is a floor for regular high end.

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

well im being pressured to go to aspen but only maybe 1 mo out of the year, i suspect its due to salt. but in any case, i have at least 5 mos of free reign. if they try to make me stay anything in excess of 2mos. i will start lookin for a new job. lol

also ultra rich people will not sell their properties. usually cuz once they run the numbers, comissions and taxes are expensive. if anything they will maintain multiple properties, but shift the time spent in the lower tax area. they will most likely they will prefer to lease that ****. so imo. even ultra high end will not get hit. 

I love my cheese. I got to have my cheddar.

Nerdy, I was talking about high end suburban real estate. It will be affected by the tax bill, and prices have already been affected by other factors: 1) depressed and more uniform (fewer high outliers) wages in the financial industry, and 2) flight to the city among younger professionals.

Take this house as an example. The owner has failed to sell the house for 7 years, and is now asking for the same price he bought it for in 2006. What price will this end up selling for?

https://zillow.com/homedetails/44-Montview-Ave-Short-Hills-NJ-07078/38676611_zpid/

Let’s say this house would have had a buyer for $5.4 million: 10% lower than the current listed price. This price would be about expected through negotiations if a serious buyer surfaced in 2017 for this property. Most likely, the price will be lower, given that the house is still on the market. Already, the buyer has lost money, while NYC real estate prices have skyrocketed over the same time.

Now consider the impact if SALT deduction were to be capped at $10k for this house with $110k of annual taxes. Let’s assume the marginal tax rate is 40% for buyers of such a house. Before the tax reform, the owner could save 40% x $110k = $44k a year through the deduction. After the tax reform, he can only save $10k x 40% = $4k. The present value of $40k in perpetuity (let’s assume 4% interest rate to reflect residential borrowing rates, and no change in taxes), is $40k/4% = $1 million, or 16.6% of the asking price of $6 million.

So in summary, policy is going to have a material effect on these properties. No one wants to hold these houses, given the huge carrying costs and apparently total lack of capital appreciation potential. The owner most likely still has a mortgage on the house. The rental market in this area is poor - people don’t move in and pay $20k rent on something in this area. Most likely, the owner is getting old and needs to downsize. He might not be making the seven figure income he had in 2006 at the height of finance, and when everyone thought it was just going up. At some point, the owner will just take a loss and move on.

This is a common story across all these areas. I can tell you all this because I know people who are facing this exact situation.

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ohai you should low ball this sucker 4.9995 mil

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Man, I wish I had $5 million to spend on frivolous lifestyle things. Without the house, I am rich. With that house, I am poor. Anyway, $5 million is a high ball price. This guy will be lucky to get $4.5 million under these conditions.

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just hire one of the guys from million dollar listings, they always get the highest price, ALWAYS.

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