Buying a House at Auction

[mark]

Anyone done it? There's a house in the neighborhood that I just found out is going to go up for Foreclosure Auction. Its a fixer, but looks like a good investment. This would be to either flip or most likely turn into a rental. Looks like someone started complete remodel after a stove fire and then walked away.

My current house we bought from the 'bank' after the previous owner signed it over (pre-forclosure), and I might contact the lender that owns this property and see if they would be interested in selling it pre-auction. But I'm curious about the court-house step auctions.


Are there really good deals to be had?
Do you have to have cash-on-hand or can it be 'pending financing'?
Anyone done it? What was your experience? Would you do it again?

Kind on the fence about trying to make a deal ahead of time, or gamble on the auction, or stay far away.

 

[zuk88]

Going to be doing the same thing with my looser neigbor house forclosing. I would level the house and keep the lot open to add on to mine.

 

[DHR Darren]

You need financing lined up ahead of time. Basically a line of credit for $ XXX, XXX or cash to buy.
I had 48 hours to fund when I did it in 99.

 

[Corey Y]

The ones I looked at were cash or check on the spot. Some had a reserve price. Some were under $50,000 and at that price were not a good deal. Contact who ever owns it and ask them your questions.

 

[bent]

I'm an appraiser, I see the inexperienced getting raw deals on these all the time. Experienced investors know just what to pay in order to come ahead, non-experienced pay too much. In my opinion, it is best to be able to know what type of home you are getting into (condition etc) through the normal process of inspections and using an agent.
If you have money to invest, the homes needed in shortage right now are affordable entry level homes. The last good flip I saw a guy do was he took a manufactured home in fair to average condition (not poor condition) and cleaned it up with paint, carpets, plumbing & lighting fixtures, new appliances, painted cabinet fronts, good furnace, roof siding and windows. He knew a unit of the same size would sell top dollar $150k, he purchased his for $50k, put 25k into it and sold it right away for $150k. After real estate agent commission, taxes etc he cleared a good $50k in a few weeks worth of sweat equity.
The first thing you need to know is what a similar size home sells for (all fixed up) in the same neighborhood (compare apples to apples, not a 2 story compared to a split level etc) and you need to get the home cheap, not a little cheap!! BUT CHEAP! A $50k spread is the minimum... Call me if you want to discuss things 253 686-1067 Keith. I see folks make bad decisions all the time and a lot of them are at auctions..

 

[cisco]

If you're interested in a foreclosure, try to buy before it goes to auction. Find out how much they owe and offer to buy the property for that amount plus something to make it worth their while. Check for back taxes and leans. You will use a ***le and escrow company to make sure the deal is legit. You can also get conventional financing for this type of deal.


For auction properties in king county, the best thing to do is sign up with Vestus. They will bid for you and handle the payment. They can also get you connected up with bridge loans and pre approved financing. Unless you have the entire amount in cash, you have to buy with a bridge loan and then pay that off with normal 30 year fixed financing. Everyone involved will take a cut. It's hard to do on your own without experience. You most likely wont get to see the inside and most homes that get repossessed they get thoroughly trashed. Buying directly from the owner is by far the best.

 

[cisco]

If your interested in the process, go down to the courthouse steps on Saturday morning when it's happening and watch. Highly recommended before the actual house you want comes up.

 

[junkyard jim]

Keep in mind that a LOT of these houses were methlabs either before or after they were abandoned. There have been 7 in Lynnwood that I know of. Auctioned homes don't have to go through the testing because they are as-is.

 

[jimpaget]

I had a customer who bought and flipped auctioned houses for a business. He was always amazed at what he found, because he couldn't get into the houses to look at them before the auctions. Sometimes all the copper pipe had been cut out, after the walls were cut up to get to the copper. Sometimes all the appliances were taken, and I am talking furnaces, etc. He always set a price he was willing to pay in advance, assuming the worst.

 

[pokey]

I had a customer who bought and flipped auctioned houses for a business. He was always amazed at what he found, because he couldn't get into the houses to look at them before the auctions. Sometimes all the copper pipe had been cut out, after the walls were cut up to get to the copper. Sometimes all the appliances were taken, and I am talking furnaces, etc. He always set a price he was willing to pay in advance, assuming the worst.

yep. I do a lot of work for a couple of flippers and sometimes their gems but usually they are dumps or have been trashed,

 

[mark]

Good advice, please keep it coming.

Good thing is I can look in the windows and see in just about every room, so I can get a pretty good idea of what I might be dealing with. At least I know it doesn't apear to be a meth house LOL. Il. Be sure to price my offer (if we go forward) appropriate, and be ready to let it go if someone wants to pay too much for it. Houses in this neighborhood look like they are going for around 330-350K. I probably wouldn't pay more than 200k figuring it's going to take 50-75K+ to put it back together the way I would want to, assuming there is no hidden structural issues. (Remember, I would want to keep it as a possible rental property). But if the market was right.......

 

[Corey Y]

What is the assessed value and sales history?

 

[DHR Darren]

The whole meth house thing is so 90's. 98% of all meth comes from mexico and has since red phosphorus and phenyl propynol has been impossible to get in 1994.

 

[junkyard jim]

Care to wager on that? There are seven in my area alone that the cops won't do anything about and you can SMELL them cooking for miles! They have a different way of making it now. (they had a blurb on it in the local paper about how they hadn't seen this formula in the US before)

Make that SIX houses now. They took one down yesterday, but it wasn't local PD that did it. FBI got them.

 

[DHR Darren]

6 meth houses that they won't bust? Seems pretty odd especially when they will bust a guy for drinking on a quad in his yard.

 

[Anthony1]

It's all about what will bring in money.

 

[junkyard jim]

It's all about what will bring in money.

They probably figure the quad guy isn't armed to the teeth too.

 

[dfowlkes]

6 meth houses that they won't bust? Seems pretty odd especially when they will bust a guy for drinking on a quad in his yard.

It's probably because they make more money busting all the junkies these ****bags are selling to

 

[junkyard jim]

Here's one they let go too long. It finally exploded.

<object height="344" width="425">


</object>[YT]L1yGO66bK8k[/YT] https://youtu.be/L1yGO66bK8k

Now they are squatting in another place nearby. They have one kid about 3 and the other is 6.

This is their "facilities"

 

[dfowlkes]

Did you take that footage?...hmmm junkyard jim, is this your place?:fawkdancesmiley:

 

[junkyard jim]

Definitely not my place. Posted by local independent news.

 

[DHR Darren]

It's all about what will bring in money.

Tweakers don't work or pay fines so how do they bring in money?

 

[stank]

My father in law just did the action house thing. Got a decent single wide on 5 acres in Marysville(not on the res) for under 100K. Had to have cash or check at time of purchase. Will be a sweet deal when fixed up, IE no house payment!

 

[dfowlkes]

Tweakers don't work or pay fines so how do they bring in money?

by keeping the courts in business and filling up our jails

 

[Corey Y]

http://www.vestus.com/ They supply bridge loans for real estate auctions.

I might be bidding on a house next month.

 

[Anthony1]

http://www.vestus.com/ They supply bridge loans for real estate auctions.

I might be bidding on a house next month.

Where?

 

[Corey Y]

Couple houses over. The people bought it in 1992 for $137,000 refinanced it twice and walked away in 2010 owing $360,000. It is just like my place with a 2 car garage and 30x40 shop.

 

[Glenn]

Couple houses over. The people bought it in 1992 for $137,000 refinanced it twice and walked away in 2010 owing $360,000. It is just like my place with a 2 car garage and 30x40 shop.

Wow! :eeek: I wonder how they ended up that far underwater.

 

[pokey]

Was real easy to over borrow a few years ago that's why the mess is here now. We flip houses on a regular basis. All I can tell people wanting to do this is to do your homework and have or be a good lawyer. The bank auctions are pretty safe but you will pay more. Stay away from the sheriff's sales unless you can afford to loose money or have it out for a while. Lots of pitfalls with these types of sales. Do your best to inspect before bidding. Its not uncommon to get inside a closed up house to inspect not that I advocate such things. Tweakers and disgruntled Tennant wreak havoc sometimes and while things may look good on the outside wiring and plumbing can be missing. Rodents do a lot of damage to wiring and insulation as well and must be dealt with. Having a crawl space on a 2000 sq ' house cleaned and insulated can run $4-5000 easily.

 

[Anthony1]

Couple houses over. The people bought it in 1992 for $137,000 refinanced it twice and walked away in 2010 owing $360,000. It is just like my place with a 2 car garage and 30x40 shop.

Let me know if you need any help filling the new shop.:redneck: