Man Buys All 650 Foreclosed Properties In One County For $4.8 Million In Back Taxes

Why settle for scooping up one tax-foreclosed property when you can nab say, 650 of them in one fell swoop? Of course, being a millionaire helped in the case of one Michigan man who plunked down $4.8 million to buy every foreclosed property in a recent county sale. All he had to do was pay off the total amount of back taxes owed, and voila! He’s got a bunch of property and is the only one in county history to have pulled off such a feat.

The businessman says he just went for something that was available to anyone after authorities said the properties could sell as a package deal. He says it’s not like he’s the only one who could’ve gotten such a deal — he was just the guy who went for it.

“I paid all the back taxes that was due and that’s what the county wanted,” he explained to MyFoxDetroit.com.

Of course, some of his fellow hopeful buyers were a bit peeved to see all the properties go in a flash without the chance to bid on any of them. One particularly dumbfounded Canadian investor said his company had been willing to bid much higher than $4.8 million.

“The price we were willing to pay is like three to four times what they’re asking,” he told the news station. “If we knew it was going to happen like this, we wouldn’t even have spent any time. They could’ve made more money, I mean triple the money they made.”

The new owner of those 650 properties says he’s willing to part ways with some of the houses and has been flooded with emails from interested buyers. He’s even offering to sell for near-auction prices and says his situation as a private citizen will benefit buyers. Any lots or homes he can’t sell he’s going to donate.

“There’s no hype, they will just buy it at a realistic price,” he said. “And they can look inside before they pay for it, which they can’t do with the county.”

Fox 2 News Headlines

Millionaire buys every tax-foreclosed home in Macomb County [MyFoxDetroit.com]

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  1. GitEmSteveDaveHatesChange says:

    So is the Canuckistan company pissed that they weren’t sold in an auction, but instead a Buy It Now price?

    • YouDidWhatNow? says:

      MAI AWKSHIN SNIPER THINGY DON’T WORK NO GUD IF U HAZ BAI IT NAO!!!11!!one

    • Hoss says:

      The investor seems to have wanted select properties, not the lot. He seems to be upset because he was willing bit bid 2 to 3 times the tax lien on those properties. Well, it’s likely they were not willing to bid on the properties with the highest liens. And that’s why the county sold as a lot — so they wouldn’t be stuck with properties worth less than the liens.

    • Fafaflunkie Plays His World's Smallest Violin For You says:

      I wonder if the Canadian who was wanting to buy those properties in Macomb County was the same buy who bought the Pontiac Silverdome for under $600,000? Is he hoping the state’s economy will do one hell of a bounce-back, giving him a thousands% ROI? Here’s a suggestion–use that money and buy some lottery tickets. Your chances would probably be better.

      • Fafaflunkie Plays His World's Smallest Violin For You says:

        Damn — EDIT BUTTON would be nice here… I’m sure a better version of WordPress would have given you one, Consumerist! “buy” of course should have been “guy” in line 2 of that last post.

  2. Torchwood says:

    Is this guy a Ferengi or what? Opportunity plus instinct equals profit.

    Of course, one has to question what condition some of those 650 homes are really in, and how much renovation work would be required. Of course, at $7,385, it would still be profitable. (Unless you are one of those people who considers “profit” to be an extremely dirty word).

    • pythonspam says:

      At $7385, it MIGHT be profitable. Some properties may require lots of work or be uninhabitable, forcing them to be bulldozed. These repair or cleanup plus initial investment for that lot may take any any net profit from that particular property.
      Source: I was recently househunting and considered buying a house that had burned down and rebuilding. The $10000 price tag was just the beginning of the costs it would have taken to re-ready the lot for construction.

  3. lobsterssss says:

    “Any lots or homes he can’t sell he’s going to donate.”

    Why not find out who originally owned them and donate it back to them.

  4. Invader Zim says:

    Isnt there laws in some counties that allow owners of tax sold properties a chance to pay the taxes plus interest to the buyer within so many years of the sale?

    • Saskiatas says:

      Yes, each state has their own tax sale laws and many will issue a lien certificate that allows the owner to redeem the property from the lien buyer for taxes plus interest. If after a length of time the lien isn’t redeemed, the property deed itself can be transferred. However, I’m not sure that is the way Michigan works…it might be a property sale state, so when it goes to tax sale the actual deed itself is sold.

      • waitetr says:

        Most of the auctions I’ve seen here in MI for taxes spell out in the disclosure that the redemption period has passed and by court order all liens/interests in the property have been cleared.

      • mharris127 says:

        In Michigan once the taxes are two years past due a judicial hearing is held and more than likely the judge will award the property to the county.

    • Sad Sam says:

      Agree, here in Florida when you buy the tax certificates you don’t get the property until some time has passed and the owner has not made good on paying of the tax lien. I guess each state is probably different.

  5. fsnuffer says:

    Right now there are 650 families getting ready to take “adverse possession” of the properties. It will take years for this guy to get rid of them

  6. who? says:

    We had a guy buy every foreclosed house in my zip code in 2008 and 2009. 74 houses. Most were dumps when he started. He rehabbed every place (pretty nicely, I might add), and resold them all, most for about double his original purchase price. Not something that would work just anywhere, it was a neighborhood that was on the cusp of being “hot”, but it kept all of the foreclosures off the market, and kept prices in the overall market from really dropping much. He stopped when he couldn’t buy the foreclosures for a low enough price anymore. Now, in 2012, prices have gone back up to pre-crash levels, so there aren’t really any foreclosures.

    • Kate Blue says:

      Sounds like he did your zip code a big favor all those dumps now look nice and the whole area is worth more.

  7. DuckNCover says:

    As long as he does something with the properties and doesn’t just let them continue to sit there, I see nothing wrong with this at all.

    • Deep Cover says:

      Nothing is being done with the properties NOW. Remember, this is metro Detroit. People have LEFT.

  8. SirWired says:

    While this is a magnanimous gesture, I wonder if he talked to an attorney first? Keeping all these properties kept up until he can otherwise dispose of them is going to cost a lot more than $4.8M.

    • Hoss says:

      Magically, none of the properties now has a lien. He says he wants $7MM. If he can cherry pick 100 properties and sell them for $70,000 each he’s done. He can dispose of the balance by selling for $1 each. – and get free publicity as a generous business person as well as free tax losses against the assessed values.

      • SirWired says:

        If your name is on the deed, you are responsible for upkeep. Period. If a property in a $hitty neighboorhood contains nothing but a house fit for the wrecking ball, who’s going to buy it (even for $1) or accept it as a donation?

        Nobody. Meaning the property owner is on the hook for demolition and regular groundskeeping. (Generally defined as keeping the grass low enough so that it can’t hide dead bodies…)

      • GodfreyOriole says:

        Since he got each house for about 7400 he can bulldoze EVERY house and sell off the land. empty land is much easier to keep and cheaper to let sit then land with a house on it.

  9. Hoss says:

    Here;s how this works. You have liens worth almost $5MM on 650 properties. There’s likely an 80/20 rule in effect — meaning $4MM (80%) of the liens is with 130 (20%) of the properties. The investor that did all his research on specific properties is upset that he wasn’t abe to bid on the most attractive properties in the lot. But the county doesn’t want sell the 520 properties with low liens and be left with 130 properties with high liens. So they reduced exposure and sold the lot to the highest bidder.

    • consumerd says:

      To be honest the county came out clean here and did it correct. letting investors “cherry pick” is the same crisis that the banking institutions created in this country when the govt. started passing out money. I for one agree the county did it correct, either take it all or don’t bid. Just because this guy stepped up to the plate and bought it all including the high lein ones, he’s coming out ahead and doing the local community some good. This guy should get a consumerist “gold” award as he is doing some good! Granted he’s still making money, but he’s doing good by far consider what the canandian company wanted to pull.

  10. Tambar says:

    Every one of those titles will need to be ‘quieted’ in some fashion, which can take a few grand each. A businessman as clever as this one appears to be would know that.

    BTW, there are still half million dollar homes in Macomb County; it’s north of the city of Detroit and much of it is on the desirable recreational waterway Lake St. Clair. Several marinas and lakefront restaurants are interested in some of the properties.
    If you’re picturing dingy and weed-covered, asphalt-shingled house after house, block after block, that is (sadly) Detroit, not Macomb County.

    • Azagthoth says:

      Tax sales are uninsurable for up to seven years after the sale locally because the owners have that long to still pay the taxes they owed and have the county negate the sale. Tax sales can be a great find, or a huge headache, usually the latter.

  11. mrsj says:

    I used to live in Macomb County. Nice houses, good schools, great place to raise a family. This is NOT the metro Detroit so often paraded before us on the news. Wish i had the $$ to do the same thing.

  12. GodfreyOriole says:

    Thats 7400 for each house. The land is worth more then that. He can bulldose every house and sell off the land. I am sure good house will either be sold right a way or updated and sold. The rest will probably be bulldozes and sold off as land.

    If he gets a lot of properties that are next to each other he can build condos on the land or sell to a developer. This guy can make a TON of money if he was smart.

    • StarKillerX says:

      Do you realize just how expensive demolishing, and hauling away, a house can be?

      • bbb111 says:

        And in many counties the permit for demolition can be denied.

        Selling undeveloped lots in a developed area can take a long time in all but “hot” areas. It can be almost impossible in an area where you can by an existing house for less than construction costs. [Then your only chance is someone who owns an adjacent property.]

      • Tenacity says:

        We just bid this for a property we bought (north central Maryland). Taking out the old house and getting rid of the debris – $5000.

  13. Alex d'Indiana says:

    How’d he get to buy all these properties without an auction? Something fishy happened here – it wouldn’t be the first time the government sold property at a discounted rate to a local VIP instead of doing its best to make the biggest profit for the people it represents.

    • bbb111 says:

      It’s a form of “Buy it now” (like on ebay and some public auction houses) . Legal if it is in the laws for tax lien auctions in that county and fully disclosed.

      This probably gets the government the most money because they get the full back taxes on all the properties instead of having many go unsold or sell for less. The purpose of the auction is to recover the back taxes, not profit. [and the laws might require them to give any overage to the property owner (mortgage repossession requires this, but it is rare that a house would sell for more than the mortgage plus expenses.)