Own a Home for $1000

From CNNMoney.com - "Radical cheap: $1,000 homes":

The real estate market is so awful that buyers are now scooping up homes for as little as $1,000.

There are 18 listings in Flint, Mich., for under $3,000, according to Realtor.com. There are 22 in Indianapolis, 46 in Cleveland and a whopping 709 in Detroit. All of these communities have been hit hard by foreclosures, and most of these homes are being sold by the lenders that repossessed them.

Pull out your credit card, this could be yours:

In Detroit for instance, Century 21 Villa owner Randy Eissa has a three-bedroom, one-bath bungalow of about 1,000 square feet listed at just $500. It's a nice place with lots of light, but it needs a total rehabilitation inside, which Eissa estimates will cost between $15,000 and $20,000. But that's not bad, considering that the home last sold for $72,000 in late 2007, according to Zillow.com.

What's happening behind the scenes:

With prices this low, lenders aren't looking to make any money on these deals. They just want to get these houses off their books, so they don't have to bear the cost of maintaining them and paying property taxes.

In fact, the $500, $1,000 or $3,000 that a buyer forks over often goes straight to the real estate brokers as a commission. And often the lenders have to kick in extra cash to make it worthwhile for a realtor even take the listings, according to Eissa.

"Usually these homes are bank repossessions that the lenders have already tried to sell on the market, perhaps then put up for auction without success and then re-listed," he said.

Really, I never would have guessed. "Small fixer-uppers"? How about MAJOR fixer-uppers?:

These houses are almost always small fixer-uppers. Wiring, plumbing and heating systems have to be replaced, walls and ceilings sheet-rocked, plumbing and light fixtures installed and new kitchen cabinets and counters put in. Few come with working appliances.

Ahhh, they finally get to the EXTREMELY IMPORTANT POINT that I was going to ensure was made:

Buying homes like these is certainly a leap of faith; they're generally not in the best of neighborhoods and they're often surrounded by many other vacant and deteriorating homes. Still, some of these neighborhoods may turn around and
provide residents with good, dirt-cheap housing.

We can attest to these types of values. They're real and they're out there. The previously quoted paragraph is worth reading a few more times. Most of these deals are great ONLY on paper. Investors are in every market. If these homes couldn't be sold before they were foreclosed upon, were taken back by the bank and couldn't be sold, and finally went to the auction and still couldn't be sold, there's a problem. Yes, there's a chance somebody could have overlooked a gem, but, like winning the lottery, not likely.

I'm not here to offer discouraging sentiments as our livelihood depends upon real estate investing. There are great opportunities out there right now. Just do your homework and surround yourself with proven real estate investing experts local to these types of deals and markets otherwise this may be the worst $1000 you've ever spent.