What They Don’t Tell You About the $1 Property in Michigan

What They don’t tell you about the $1 property in Michigan is that you’re not just going to pay $1 and immediately start renting it out for $700 a month or so! They give the impression that many out-of-state investors are buying property, usually vacant houses, in Michigan, and renting them out for $700 a month or so, but there are a few other things they “forgot” to tell you: First of all, you’re probably going to have to spend a FEW THOUSAND DOLLARS to make it liveable, as it may have been vandalized (meaning a lot of stuff is gone, such as metal objects - light fixtures, appliances, and such - that can be sold easily for CASH)! But the MAIN THING they don’t tell you is that Michigan has a peculiar law that requires ALL PROPERTY TAXES to be paid up front AT CLOSING, plus you’re going to have to pay for an inspection by the city, as well as other fees such as a brokerage fee (you didn’t think the real estate people were going to WORK FOR FREE, did you?). If the previous owner has paid all the property taxes already, then Michigan law says that YOU MUST REIMBURSE HIM\HER!

How do I know this? I contacted a Michigan real estate firm and told them I was interested in buying some of their $1 properties, and they “wised me up” pretty quickly. They said all the above fees might amount to around $3,500 PLUS REPAIRS! So, like most things in life, there ain’t no FREE LUNCH! I’ve never had much luck with buying things that were “too good to be true” and then reselling them for a profit! We usually get what we pay for, don’t we? And a house for $1 is probably not worth much more than that! Think about it!

Copyright 2014 by Preston Smith