Elmer Johnson attended Baltimore's annual auction of tax-delinquent properties looking for a bargain -- a house for only a few hundred dollars.
He joined 400 others crammed into the War Memorial yesterday, hoping to buy a few houses in his Northwood neighborhood to rent out.
But like others at the sale, Mr. Johnson knows he has little chance of ever owning one of the homes.
The original owners have six months to pay up and regain their properties, and 90 percent do, said Assistant City Collector Ottavio Grande.
So why do so many people show up to bid on the 4,900 properties listed for sale?
It's a great investment.
Those who buy properties at the tax sale, which continues today, stand to make 24 percent annual interest on their investments. Here's how:
A winning bidder pays the city the amount of a lien, which could be for property taxes, water bills, late penalties or other unpaid bills owed the city.
Any recalcitrant property owner who redeems his property within six months must pay the lien amount, plus 24 percent interest, figured annually.
The auction bidder then gets the 24 percent interest payment, plus the money he paid on the lien. For example, a house with a $5,000 lien will bring a bidder $600 in interest if the owner reclaims the property at the end of six months.
Mr. Johnson, a transportation supervisor for Roadway Package System, said he would like to buy a few houses, but if the current owners redeem them, "the 24 percent interest sounds good, too."
Many more high-powered investors attended yesterday's tax sale, armed with assistants and calculators as they bid thousands of dollars on commercial and residential property all over the city.
Others joining the auction were looking for a different kind of bargain.
Several non-profit housing groups were there to bid on vacant houses that may not be redeemed by owners who have abandoned them.
The groups hope to buy the houses as cheaply as possible, then renovate them for poor tenants or homeowners.
Frank Hodgetts, representing the Baltimore Housing Roundtable -- a consortium of non-profit housing groups -- was planning to bid on six to 10 houses.
He was hoping to pay as little as $6,000 for all of them.