Quoting from a blog post called GRABBING THE DRAGON’S TAIL: AN EXAMPLE OF AMBITION & TERROR (NO PROPERTY LEFT BEHIND):
Every year Wayne County has a huge tax foreclosure auction. As far as I can tell, it is the biggest property auction in the world (please correct me if I’m wrong). This past year just over 13,000 of those properties were in Detroit, each being auctioned for an opening bid of only $500. LOVELAND mapped and tracked the whole thing live at WhyDontWeOwnThis.com and tallied 1,132 unique bidders buying 5,815 properties for a total of $20,580,806.
[Note: you can see a pre-auction Detroit News video on the project as well as The Land Blank experiment with Andy.]
That’s a lot of action, but it also means that 4,510 properties were left on the table. At $500 a piece, if you wanted to buy all those properties you would have needed $2,255,000. That’s a number that I would call both big and small, right?
So imagine this scenario. What if we set up a crowd fundraiser for the 2012 Wayne County Tax Foreclosure auction trying to raise $2,255,000, using last years leftover numbers as the base. The way it would work is as follows:
• People pledge funds with their credit cards but no one is charged anything until the auction
• The auction happens online, so we write a script that tracks all auction clocks and bids on properties at the last possible momentonly if they have received no other bids
• At that point we extract the appropriate amount of funds from all funders equally. So say for the sake of easy numbers that there are 500 who’ve pledged money into the pool, when one $500 property is bought $1 is taken from each of them to cover the cost
• This repeats until each funder has hit their pledged limit and the pool runs out. If there isn’t an opportunity to spend the entire pool then people are never charged the remaining amount
Now let’s say this year’s auction plays out similarly to last year’s. Let’s say 4,000 properties receive no other bids, and the group ends up buying 4,000 properties. Is this a good thing or a bad thing? Well, there’s where the terror starts to kick in. Now that you’ve grabbed the dragon’s tail, what do you do?