Author Topic: Krazy Kommercial real estate around DETROIT!  (Read 15935 times)

Gregmal

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Re: Krazy Kommercial real estate around DETROIT!
« Reply #10 on: October 30, 2016, 09:19:24 AM »
Hey all:

I have not purchased this property...

While it passes almost every test...the problem is the property taxes.

I am going to try and get an option contingent on getting the taxes lowered.  The property simply does not work with the current level of taxation.

I also want to see what happens with the election and see if the economy falls into chaos again...

Right now real estate is/has been strong in the Detroit area.  It makes me think that the stupid money is flowing in now...after prices have risen.

If the economy declines substantially, the Detroit area is going to get hit HARD. 

If there are any developments, I'll let the board know.

Maybe its different in Detroit but I've actually seen and used this kind of a strategy as leverage in transactions like the one you described. You simply argue that the tax rate is too high and are bearing substantial risk in taking on the property. You also point out that every month that goes by thats another "x amount" of carry cost being eaten by the seller so his best bet is to get it taken off his hands asap, even if it s at a great discount. If he holds these another year his $42k ask is now equivalent to 34k. The key however is to know the local real estate market and what the process is for appeals, which obviously includes the likelihood of getting it adjusted in your favor. Where I am, you generally just have to show the market value contradicts the assessment, in which case a contract of sale will do the trick. That should then theoretically take your assessed value down from 42k per, to 42k for both, likely cutting the tax bill in half.


DTEJD1997

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Re: Krazy Kommercial real estate around DETROIT!
« Reply #11 on: December 21, 2016, 02:22:41 PM »
Hey all:

Just got home for the evening...

I bought that KRAZY KOMMERICAL PROPERTY outside of Detroit...

Of course, the $40k price for 2,600 sq. ft. of office space was just KRAZY EXPENSIVE.

So we reached a deal of $25k for the two buildings.

Of course, the buildings need a thorough cleaning and actually need some renovation. 

Fortunately, the plumbing (copper), electrical, HVAC, roof, windows are all good.  A rear door needs to be replaced.  Carpeting needs replacing...

I figured at about $11/sq. ft, that it was not a too bad a deal for commercial real estate that does not need extensive work.

I figure one building will be retail, and I'll use the other as professional offices.

Perhaps I'll upload some pictures later...

Parsad

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Re: Krazy Kommercial real estate around DETROIT!
« Reply #12 on: December 21, 2016, 03:10:28 PM »
Hey all:

Just got home for the evening...

I bought that KRAZY KOMMERICAL PROPERTY outside of Detroit...

Of course, the $40k price for 2,600 sq. ft. of office space was just KRAZY EXPENSIVE.

So we reached a deal of $25k for the two buildings.

Of course, the buildings need a thorough cleaning and actually need some renovation. 

Fortunately, the plumbing (copper), electrical, HVAC, roof, windows are all good.  A rear door needs to be replaced.  Carpeting needs replacing...

I figured at about $11/sq. ft, that it was not a too bad a deal for commercial real estate that does not need extensive work.

I figure one building will be retail, and I'll use the other as professional offices.

Perhaps I'll upload some pictures later...

Yes, please do so...would be interesting to see.  Cheers!
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DooDiligence

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Re: Krazy Kommercial real estate around DETROIT!
« Reply #13 on: December 21, 2016, 11:39:34 PM »
Any reconciliation with the taxing authority yet?
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[prepared 2 wait]

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ScottHall

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Re: Krazy Kommercial real estate around DETROIT!
« Reply #14 on: December 21, 2016, 11:45:38 PM »
Great to hear DTEJD1997. This is an interesting story and I'm excited to hear how it plays out.
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DTEJD1997

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Re: Krazy Kommercial real estate around DETROIT!
« Reply #15 on: December 22, 2016, 05:11:44 AM »
Any reconciliation with the taxing authority yet?
No, not yet.  Tax contesting season opens in the new year.  February I think....

HOWEVER, I did go to the city's tax assessors office.  They admitted that a lot of properties are "out of whack" and that on this property the taxes are probably at least double what they should be.  The taxes are probably 3X or 4X what they should be...but if I get them cut in half, I will take it.

One of things that gives me optimism is that there are a few vacancies that got filled and a couple of rehabs that are starting within a 1 mile radius of the property.

Not that this suburb will ever be a "prosperous" suburb...but it looks like it is getting just a bit better.

DTEJD1997

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Re: Krazy Kommercial real estate around DETROIT!
« Reply #16 on: December 23, 2016, 09:21:43 PM »
Hey all:

Started moving stuff into the buildings yesterday.

This is going to be a lot of work!

Tried to get utilities switched over today, but offices said to call back during "regular business hours"...oh well.  Maybe they'll be back to work Monday.

My buildings are the red brick buildings in the center of the photo...specifically 21040 & 21044.  I'll post some interior photos over the weekend.

augustabound

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Re: Krazy Kommercial real estate around DETROIT!
« Reply #17 on: December 24, 2016, 03:01:20 AM »
That is awesome, congratulations. Good luck with the tax assessment.
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DTEJD1997

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Re: Krazy Kommercial real estate around DETROIT!
« Reply #18 on: December 24, 2016, 05:57:03 AM »
hey all:

Here is a picture of the rear of the buildings....As you can see, one of the buildings goes back just a bit further than the other.

There are a few good things....

A). Each building has it's own door
B). Each building has it's own HVAC system
C). The A/C units are on the ground!  I was alarmed at first, but the prior owner stated (correctly?) that if they weren't stolen fiddled with previously, why now?

I promise some more interesting photos to follow soon...

DTEJD1997

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Re: Krazy Kommercial real estate around DETROIT!
« Reply #19 on: February 11, 2017, 11:26:24 AM »
Hey all:

Everything is progressing...just taking a LOT more time & energy than initially expected.

Got the first water & sewer bill the other day....This is reason # 5,796,473,954 why Detroit & Michigan have sunk so far into poverty & despair. 

Total bill was almost $110 for 35 days of water & sewer.  Water use was just above nothing.  A lot of days there is NO water used at all.  The vast majority of time, I am the only one there. 

She then informed me that consumers have to pay for pensions AND all the unpaid water bills in Detroit...There were 90,000 unpaid water bills in Detroit according to the NYT:

https://www.nytimes.com/2014/07/04/opinion/going-without-water-in-detroit.html?_r=0

keep that in perspective.  Detroit now has about 700k residents, down about 65% from it's peak population.  If there are two residents per household, that means that about 26% of Detroit households are not paying their water & sewer bills.

Water & sewer in Detroit is MUCH more expensive than in Las Vegas and Texas. 

Finally, consider that Detroit sits atop the best fresh water resource(s) in the WORLD.  Also consider that the infrastructure is probably 100+ years old and has certainly been paid off by now.  The major spending is on maintenance & upkeep, no huge capital outlays needed to build it.

I am going to guess that if there weren't MASSIVE problems here, you would not be able to buy commercial buildings for $11/sq. ft.