1. A $500 house never actually costs $500.

At best you’ll have to invest about $10k in repairs to make the home livable. At worst, some of these homes can be in shambles AND have a value of –$40,000 because of back taxes, liens, water bills, and any number of other things.

TlL;DR: You can’t just pay $500 and move right in. But you can buy a $500 house, invest some time and money, and have a great property for $30,000-plus (which is a lot less than anywhere else in the country).

2. There are multiple public agencies that run property auctions in Detroit.

The biggest and most well-known online auctions are the Wayne County Tax Auction and the Detroit Land Bank Auction.

The Wayne County Tax Auction is run by the Wayne County Treasurer’s office. Last year they sold over 24,000 properties online that had been in foreclosure, for a minimum bid of $500.

The Detroit Land Bank is a newer public authority that auctions three properties a day for a minimum bid of $1,000, plus closing costs and the current year’s property tax.

3. Houses get to auction when an owner fails to pay the property taxes or the mortgage for a set period of time.

For many Detroit homes, the first auction price is just the amount of liens and taxes owed on the house. If no one buys them then, they either go to a second auction where the prices start at $500 or they are given to the Detroit Land Bank where the starting price is $1,000.

Want to know more? Got the drop at BuzzFeed . . .