So, the foreclosed-property aftermath. The first is that my father is still riled up by this. He's enthusiastic. Every time we've talked since then he's brought the conversation around to how we should totally be buying and flipping houses. Or renting them. Whatever. A couple times a week he e-mails me a likely-looking house in the area. He also promised to put together a budget showing the materials and parts and necessarily-contracted-out labor for the house across the street, so that we could have a better idea what sort of expenses to expect if we go into this again, which he's positive we totally should.
The next is more me pondering something. We were thinking of buying the house for the sake of bettering the neighborhood. Making money would be a secondary motive. But we would prefer to make money, or at least not lose too much on the deal. Would we? And making some estimates about what we'd spend for the house, and for immediately needed repairs, and using our house as an estimate for what ongoing maintenance costs over there would cost, we got ... some really exciting numbers. Really, really good ones. If we didn't grossly overestimate how rentable the house was and grossly underestimate how much it would cost to keep, the house would fall short of being a money factory, but not by much.
Which demands the question: so why didn't deeper pockets buy it? I suppose they might have, since the house was one of the few that got a bidding war started. But it probably could have been won for another two or three thousand dollars, and our calculations suggest that would be recouped in rather a short time.
I am not so fantastically naive as to buy the Efficient Market Hypothesis. I know that markets are stumbling, emotion- and tradition-laden bundles of people telling themselves they're the only smart people in the room coding their prejudices into formulas and algorithms. But if we could make these calculations, so could anyone, including people from ConGlomCo Evil Real Estate Flavored Investment Holdings, LLC of the Cayman Islands. So why aren't they?
Maybe we just happened to be across the street from the only diamond in Lansing. Maybe every other spot would be a money pit unredeemable even by favorable tax policy. Maybe we overestimated the profit potential of this, and a more seasoned eye would see the Lansing tax-foreclosed property market as promising but not crazy good.
Still. There's another round of auctions next week. And there's another house, at the end of the street, where we wouldn't see it even if it weren't barricaded by trees. But it's got a cheap starting bid. (It had been part of a huge block of six dozen or so properties which didn't move at all in that auction. Now it's been split off to its own listing.)
Trivia: Thomas Neale launched the first British government lottery in 1694. The Million Adventure offered a first prize of £1,000 per year for sixteen years, for a £10 ticket. Losing tickets received £1 per year for the same period. Source: Devil Take the Hindmost, Edward Chancellor.
Currently Reading: Discord: The Story Of Noise, Mike Goldsmith.