The city of Detroit is on a mission to unload its blight, with plans to foreclose on one of every five properties in default in the city. Last week, in a mega-auction, one bidder offered up $3.2 million for a bundle of more than 6,000 foreclosures, which equates to about $500 per property.
The bidder has remained anonymous. It was the first bid for the bundle of properties since the auction opened earlier this month, Bloomberg reports.
“I can’t imagine that you are going to make money on this,” says David Szymanski, chief deputy treasurer of Wayne County, which is selling the dilapidated properties. The county can seize the properties when owners fall behind on paying their taxes.
What the bidder will get if he or she wins the auction: About 3,000 properties that are flagged to be torn down, about 2,000 empty lots, and about 1,000 homes that may hold some value. The homes are all sold as-is, which means some may come without furnaces or wiring and have mold, squatters, or more. What’s more, the winner of the auction is required to demolish the rundown buildings within six months, which could cost about $24 million.
Nevertheless, Szymanski says a bidder has offered to buy the entire “blight bundle.”
“It could be—and this is all speculation—that the people who are bidding on it are altruistic in nature,” Szymanski says.
The auction is still open.
Detroit has been battling blight since the housing downturn. A city task force has called on tearing down 10 percent of its structures. Wayne County has become the major spot for blighted properties. This year alone, the county has started foreclosure proceedings on 56,000 properties – 20,000 of which are expected to head to auction. In 2015, county officials estimate they’ll foreclose on 75,000 additional homes.