YOUR SUCCESS BUYING AT THE AUCTION - Posted by bobcmd

Posted by Natalie-VA on October 24, 2009 at 09:52:45:

We’ve done many rehabs, but prefer lately to just polish them up and sell cheap. My husband runs the rehab crews, so I don’t have that added work to deal with. Not to mention, those guys are a bunch of knuckleheads, and I don’t have the patience for it.

I’m sure our markets are very different. I try to stay 1970s and newer, and have never done anything prior to 1940. Older houses are just not our area of expertise. Also, when the prices are that low, the house is often worth what I want my profit to be, so I couldn’t buy a house with an ARV of 40ish and expect to rehab and make a good enough profit, unless they paid me to take the house.

I think the larger profit spreads come with experience. I would have taken a much smaller profit when getting started.

–Natalie

YOUR SUCCESS BUYING AT THE AUCTION - Posted by bobcmd

Posted by bobcmd on October 18, 2009 at 12:41:23:

I have been following the foreclosure auction results in Baltimore city and select outlying counties for the past few months and it seems the banks are selling for less. There are several examples of houses or towns that sold for $450,000 in 2006 with mtg for $350,000 selling for $200,000 at the auction. I am a realtor and keep hearing from the various news sources that forclosures are still growing every month.

Who else is buying at the auction and are you seeing the same thing. In the high dollar areas it seems like a chance to get 50% off or better on good quality houses. Its always a numbers game, go to enough auctions make enough offers and ocassionally you hit a grand slam when the situation is right and you can pounce.

I had a good friend who was building a house for someone who stopped making payments to the bank on the construction loan. The house was 95% finished and the construction loan was $750,000 of which the bank had funded $700,000 already. We think the guy was trying to scam the bank and get approval for a short sale to a straw buyer. At the auction the bank sold the brand new 3600 sqft house for $425,000. It would only take $30,000 to finish. My friend forgot which day the auction was and missed the chance to buy the house and resell it making more than he did selling it the first time. Unbelievable chance at a lot of equity.

Re: YOUR SUCCESS BUYING AT THE AUCTION - Posted by Natalie-VA

Posted by Natalie-VA on October 20, 2009 at 12:30:28:

Hi Bob,

I buy at auctions and I also occasionally see the higher priced houses come in with a lower bid. The question, though, is 50% off of what? I’ve seen some cut to 50% of what was owed, and I still wouldn’t touch them.

It’s really just a matter of researching every single house and getting lucky on the occassional one. I’m not saying I haven’t done it, but it’s VERY time consuming. Today, for example, I am researching sales for tomorrow in two cities, and I have close to 80 houses to consider.

–Natalie

Re: YOUR SUCCESS BUYING AT THE AUCTION - Posted by Lubasha

Posted by Lubasha on October 21, 2009 at 21:07:59:

Natalie,

I am trying to invest in RE first time and looking for good buy through foreclosures. The clerk in courthouse told me in private conversation that I have no chance to succeed because investors who are buying foreclosed properties for years will not let me to cross their way; they are a team (or say ?gang?) and keep their corporate interest, let?s say, unfriendly for new comers.

Do you think it is true, and what do you think is my best in order to make my first investment to happen and stay friendly with everyone in the market?

I would appreciate your advice so much,

Lubasha

Re: YOUR SUCCESS BUYING AT THE AUCTION - Posted by Natalie-VA

Posted by Natalie-VA on October 22, 2009 at 08:51:35:

That’s a very good question, and I do find that to be true.

I would never bid higher than “my number”, but many of my colleagues will bid a newbie up. They don’t mind paying extra money to make sure the newbie doesn’t come back out.

I’m afraid what you heard is somewhat true. Your best bet would be to make friends with the regulars and offer to buy one of their properties from them. Be prepared to show proof of funds to close.

–Natalie

Re: YOUR SUCCESS BUYING AT THE AUCTION - Posted by Lubasha

Posted by Lubasha on October 23, 2009 at 24:52:51:

Natalie,

I appreciate your consideration, but if I buy from investor what should I do with the property that I cannot deal with? I don?t expect to be able to buy anything overpriced. Instead of I am trying to learn as much as I only can.

If that old stuff getting sick sometimes? Lol

Re: YOUR SUCCESS BUYING AT THE AUCTION - Posted by Natalie-VA

Posted by Natalie-VA on October 23, 2009 at 08:38:19:

I’m not advocating that you buy anything overpriced. I’m just saying that if you want to gain some respect from the regular investors at the auctions, buy something from them. They probably have inventory that they’re willing to sell.

On the other hand, keep in mind that I RARELY get properties at 65% of ARV minus repairs at auctions. There are much better deals to be had elsewhere, but I happen to enjoy what I do.

If I were trying to maximize how much money I could make on each house, I would be doing direct mail.

–Natalie

Re: YOUR SUCCESS BUYING AT THE AUCTION - Posted by Lubasha

Posted by Lubasha on October 23, 2009 at 09:30:31:

Thank you Natalie for your kind respond!

Yes, I am thinking about direct mail too and tried once but did not do it right. At this time I am looking for cheap properties in my neighborhood and I see that perspective to deal with rehabs scares me.

Are you doing major level of repairs or just minor? And do you hire someone to fix the property and if yes how do you know your expenses?

For example I am looking at a property that seats on a market since August, bank owned, they agree for 13k, assessed value 25k, market value 38,700 (which I doubt), year built 1925 and it needs at least doors, windows, paint and who knows what else.

Would you work with property like this?