City Foreclosures - What you need to know.
We get lots of calls about these, but if it sounds too good, it probably is.
At least once or twice a week I will get a call about a property listed for, typically, $2,500. A great price, for sure, but that price is only the tip of the metaphorical ice berg.
You see, these properties are city tax foreclosure properties. If you cant or wont pay your taxes long enough, the city will come and take away your property and sell it.
I think the idea was to get their money back, but there are enough blighted properties out there that they simply want someone to come buy it up cheap and bring it back to life.
They will sell you the property cheap, but they also want to make you that you actually end up doing something with it. That is where the scope-of-work comes in. Each of these properties has what is called a scope-of-work attached to it. This means that a city inspector has gone into the property and in detail, made a itemized list of everything that needs to be done to the property to bring it back to habitable, non-violation condition. These work scopes can range from $20,000 - $140,000, and not only that, but the city maintains a time line for work to be done as well.
At the time of making an offer on any of these properties, the city will want a proof-of-funds that shows you have the financial capability to bring these properties back to life.
That being said, if you are a contractor, or plan on doing the work yourself, the city is will to give you a "sweat-equity" credit towards the scope-of-work, but only a percentage of it.
Here is the link to the extended listing page of the Milwaukee County Real Estate office: https://city.milwaukee.gov/DCD/CityRealEstate/CityHouses/ExtendedListing
There is also a standard listing, which means it is only available to owner-occupants, but it is typically bare.
Till next time!