I Skipped a $1 Real Estate Deal in Detroit—Here’s Why!

In 2012, I had the chance to buy a house in Detroit for just $1.

Yes, one dollar.

It sounds like the deal of a lifetime, right? That’s what a lot of new investors might think. But I passed. And I don’t regret it one bit.

Because in real estate, price isn’t the deal—fundamentals are.

The Backstory: How I Almost Bought a $1 Home

This all started when I saw a viral YouTube video about $1 homes in Detroit. Curious, I called up Robert Kiyosaki and said, “Let’s go check it out. At the very least, it’ll be an adventure.”

When we arrived, we didn’t just find one home priced at a dollar—we found entire neighborhoods filled with abandoned houses at that price point. But as we dug deeper, it became clear: the price tag was a trap.

Why Detroit Homes Were Selling for $1

The city of Detroit had been in decline for years, primarily due to the collapse of the auto industry. Once the fifth-largest city in the U.S., Detroit lost over a million residents, and with them, its tax base and job infrastructure.

By 2013, the city officially filed for bankruptcy.

Without jobs, people left. Without people, neighborhoods crumbled. With no tax revenue, city services like fire and police deteriorated. And crime moved in to fill the vacuum.

This was the landscape we walked into: entire blocks gutted, houses falling apart, and no economic engine to support recovery.

The Hidden Costs of a “$1” Deal

Many of the homes were controlled by the Detroit Land Bank Authority, and their rules were strict:

1. You had to live in the property for 3 years — a hard no for any investor.

2. You had to bring the home up to code — often requiring $30,000 to $50,000 in repairs.

3. You had to complete the work in 6 months, or risk losing the property entirely.

So while the sticker said $1, what you were really buying was a liability—not an asset.

And even if you fixed up the house, the surrounding area was still in shambles. As I always say, you can fix a house, but you can’t fix a neighborhood.

A Lesson from Phoenix: Why Neighborhoods Matter

Years ago in Phoenix, the city listed its 10 worst properties. I offered to buy them all. I knew how to renovate, and I thought it would be a win-win for the city and for me.

But after visiting the properties and seeing the crime, drug use, and hopelessness in the surrounding blocks, I backed out.

Because I realized something critical:
It’s not about the building. It’s about the market.

If you can’t attract good tenants, if you can’t find a property manager willing to work the area, and if you can’t eventually sell or refinance, it’s not an investment. It’s a money pit.

Could a $1 Home Ever Be Worth It?

Now, there are some exceptions. If you’re:

• Handy and can do the renovation work yourself,

• A local who knows the neighborhood is gentrifying,

• Planning to hold long-term without needing a lender…

… then maybe it could work.

And to be fair, some of those Detroit homes are worth $70,000 to $100,000 today. But let’s not forget: it took over a decade to see that appreciation. Most investors wouldn’t have lasted past year five.

The Real Estate Investing Lesson

Let me make this crystal clear:

The price doesn’t make the deal. The fundamentals do.

Before you invest, ask:

• Is the market expanding or contracting?

• Are people moving in or out?

• Are jobs being created?

• What’s the crime rate?

• Is there real rental demand?

• Can I control expenses?

• Is there a clear path to refinance or exit?

If you can’t confidently answer those questions, walk away.

Detroit failed the test on every front. And despite the $1 price tag, it was one of the worst deals I ever walked away from—which makes it one of the smartest decisions I ever made.