You might decide to buy a house with a million dollars, but with an extra 4 million, you could have bought every tax-foreclosed home up for auction in Michigan's Macomb County.
That's what former yacht dealer Bill McMachen did on Tuesday, the Detroit News reports. For the dirt-cheap price of $4.9 million, McMachen bought all 645 tax-foreclosed properties in the county, including 403 residential properties.
The arrangement allowed Macomb County to bundle up unwanted foreclosed homes with wanted foreclosed homes; McMachen is taking the unwanted property off the county's hands in exchange for paying all back taxes owed, an average of $7,500 per property, according to the Detroit Free Press.
"By packaging the good with the bad, it's in the center for somebody to come in and buy it all," Macomb County Treasurer Ted Wahby told Fox 2 in Detroit.
But some investors who wanted to bid for certain properties didn't like how the sale went down. One investor told the Fox affiliate that he was prepared to bid up to four times more on some properties than McMachen eventually paid. "I feel bad that it went that way," the investor said.
Too bad, argued Wahby. "People who are going to buy five or ten houses weren't buying them because they wanted to move in," Wahby told Fox. "They wanted to make money on them, and God bless them, I wish they could have, but that's not my mission. I have a job to do. I have to collect the taxes, and that's what we did."
There were 7,057 new foreclosures -- the majority bank foreclosures -- in Macomb County in June, or one in every 348 housing units, according to data from RealtyTrac.
McMachen isn't the only investor to have taken advantage of the foreclosure crisis to buy properties at rock-bottom prices then sell to potential home-buyers and other investors for profit.
A pair of Detroit men started a "home-flipping" business that made $3 million from the sale of 300 foreclosed and distressed homes in just 8 months, Business Insider reported.
Even U.S. Senate candidate Elizabeth Warren has been accused of trying to get in on the action in Oklahoma, according to the Boston Herald.
Overall, McMachen told Fox 2 he expects to make $2 million from his investment. He and his investment partner plan to sell the Macomb County properties -- perhaps to the investors who feel they got stiffed by the auction.
"They can still buy the property from me, probably for about the same price they would have bought it at the auctions," McMachen said.
He plans to appraise and fix up otherwise unwanted dilapidated properties, the Detroit News reports.
Actually, there are some hot housing markets out there. Check them out!
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