Case Study on Worthless Properties - Is it really worthless?

[Robert Campbell]

All - I am a fairly new investor (2 years, 3 flips, 2 wholesale, 2 rentals).  I have bought several properties on Auction.com.  I was looking around on a site I have not used before - Hudson and Marshall, and I came across 2131 Fair St Louis, MO 63107.  I put a minimum $1 bid in just to see how their system works, and what do you know, I won it for 1$, and seller pays closing costs.

Hudson and Marshall called me after and asked if I was sure I wanted this property, stating it probably needs a full tear down / rebuild, and may not be worth as much as it would cost to rehab (and I appreciate the call of course).  I told them I did not expect to actually get it for 1$ and would not have bid again, and withdrew.

My question is - is there something an investor more experienced than I could do with a property like this, or is it truly worthless?  Some kind of Ive seen worthless properties before, its just hard to fathom...

[Jay Hinrichs]

Absolutely you have economic obsolescence and functional obsolescence.. those are appraisal terms.

these are usually hoody ghetto settings or very rural properties like high deserts of the West. 

so with these little houses in the mid west they suffer both.. area is economically not viable and the properties are beyond salvage..  IE you can buy existing properties in decent shape for less than it would cost to repair or build new. 

This is why cities demo houses all the time.. they suffer both syndromes. and then are targets for squatters drugs and other bad things.