- The Detroit Land Bank Authority is auctioning off thousands of publicly owned properties through its public platform, Auction – and the bidding starts at $US1,000.
- In June 2017, Vincent Orr, a native Detroiter, won an abandoned home through the bidding process for just $US2,100.
- In an interview with Business Insider, Orr explained how he transformed the home into a livable space for $US40,000.
- Visit Business Insider’s homepage for more stories.
You can become a homeowner in Detroit, Michigan, for as little as $US1,000 – but it will take a lot of work.
The Detroit Land Bank Authority, founded in 2008, set out on a mission to return run-down and vacant properties in the city to productive use. To do so, it auctions off thousands of publicly owned properties through its public platform, Auction – and the bidding starts at $US1,000.
We caught up with Vincent Orr, a native Detroiter, who purchased a home for his mother through Auction in June 2017.
Orr won the Detroit home for $US2,100 – but that was just the beginning
While Orr had the highest bid, claiming full ownership of the home required some work.
The DLBA has a compliance program requiring winning bidders to renovate the auctioned homes. After the home is renovated, a compliance officer deems the home livable or not. If it is, complete ownership is transferred to the bidder.
It took Orr nine months to renovate his property. In an interview with Business Insider, he explained how he transformed the space with just $US40,000.
Keep reading for a side-by-side look at the transformation.
Have you bought a home through the DLBA or a similar program in another city? If you want to share your story, email this reporter at [email protected].
Detroit is a major city in Michigan that was once home to the booming auto industry.
In 2013, the city filed for Chapter 9 bankruptcy protection. Now, more than five years later, more and more programs are seeking to improve the city.
Wealthy entrepreneurs are investing in the city too, like Dan Gilbert, the billionaire founder of Quicken Loans. As Business Insider previously reported, after Gilbert moved his company to downtown Detroit in 2010, he started the real-estate firm Bedrock.
Not only is Quicken Loans one of Detroit’s largest employers and taxpayers, but as of 2018, Bedrock had invested or allocated $US5.6 billion in roughly 100 properties in downtown Detroit and nearby neighbourhoods.
In June 2017, Vincent Orr purchased this home for his mother through the Detroit Land Bank Authority’s daily auction. It cost him $US2,100.
Orr, a native Detroiter, grew up in the same ZIP code where he purchased the home, in the northwestern Detroit neighbourhood of Fitzgerald.
Orr graduated from Wayne State University with a degree in media arts and is a production supervisor.
“My family roots in this neighbourhood run pretty deep,” he told Business Insider. “I wanted to stay around and bring it back to the level that I remember it at when I was a child.”
“When I first purchased the house, it was in complete shambles,” he said.
According to the neighbours, the home had been vacant for about 10 years, Orr told Business Insider.
Orr told Business Insider that the porch was torn up, the windows were missing, and the roof was caving in.
It wasn’t just the exterior of the home Orr had to worry about — the interior needed work too. The upgrading process included, among many other steps, replacing pipes and walls.
When the home was purchased, the cabinets in the kitchen were worn down and dirty, with parts missing.
Orr told Business Insider that he was able to do most of the work himself.
All in all, Orr spent $US40,000 over the nine-month renovation process, he told Business Insider.
He installed all the windows, all the doors, and the furnace.
He also handled the plumbing work and the electrical wiring.
Orr hired workers only when it came time to install the ductwork for a forced-air central heating system and to repair the roof.
The hardest part of the process was finding contractors, Orr told Business Insider. Though he did most of the work himself, things like finding a roofing company turned out to be more difficult than he expected.
He even renovated the kitchen himself.
Now the renovated space sports white cabinets, marble countertops, and new appliances.
Orr said that checking in with the DLBA went smoothly. To keep the organisation up to date, Orr sent images of the home throughout the renovation.
“For the final inspection, they didn’t have to come out, because I documented everything with photographs and sent it to them. They had been following the process along the way,” Orr told Business Insider.
“You have to show them evidence of the house being occupied, so you show them furniture in the living room, furniture in the bedrooms, and appliances in the kitchen,” Orr added.
As soon as the home was completed, Orr’s mother was able to move in. Now, he said, they’re focused on decorating.
In March, Orr purchased the home next door through the DLBA’s Own It Now platform. He won the home for $US1,200 through a blind bid. He’s now renovating it.
Homes on the DLBA’s Auction platform come with everything from property-condition reports to free tours before auction dates. There are no hidden fees or credit checks, and all the title work is done before the home is listed. The DLBA even protects homeowners from inheriting back taxes or outstanding bills on the property.
The DLBA joins a host of other organisations and people working to revitalize Detroit.
A weak housing market and low-valued homes have made it difficult for Detroiters to obtain mortgages. The Detroit Home Mortgage program, which was put in place in 2016, is working to increase homeownership in the city by lending qualified buyers the money needed to both purchase and renovate homes in the city.
Through the program, Detroiters can receive two loans: The first mortgage is for the appraised value of the home, while the second mortgage, which has a limit of $US75,000, closes the gap between the home’s sale price and its appraised value and covers the cost of renovations.
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