Foreclosures, Auctions and More!
So, in the last few months I have been doing some background work on how to start investing in the RE market. Given the $ I had for investing, I decided to focus more on buying foreclosure properties and flipping them to generate capital than buying multifamily homes to generate small cash flow.
So with that in mind, I started digging more on foreclosure properties. I did the basics as prescribed – (a) Established the invest $ (b) Identified the locations that I wanted to invest in: decent neighborhood(not best but not bad either), good school district, lower crime rate, reasonably high sale and purchase of properties, etc. (c) Partnered with a good real estate agent whose family is in the construction business, (d) looking out for other people for the team is still work in progress
I selected some properties to test my hypothesis and decided to attend some auctions to get a feel for it. At this stage I didn’t do any title research or engage anyone else to do it– all I did was shortlist 3 property auctions which fulfilled all my criteria - drove around the neighborhood, looked at the properties from the outside, spoke to neighbors and essentially shortlisted 3 that I could potentially pursue for further due diligence if I really wanted to pursue with it.
These auctions were listed on the state judicial branch website and I went with great eagerness to each but I was disappointed that in all 3 cases, the mortgage company decided to keep the minimum bid equal to the current market price which meant that essentially no one really bid anything and no auction took place. So before I went to the next auction, I called the committee in charge and they told me that they normally receive the bid from mortgage company only 1 day before the auction. In this case does this mean that the market that I have selected is getting saturated and getting foreclosure properties lower than the market rate is not possible?
So I am little confused on how I should proceed with my due diligence. In the above examples, a) I would have spent some $ in doing real research – property records are available at a cost and if I hire someone, it will cost more; b) I would have spent lot of time researching and preparing for an auction that may not take place and I could have spent that time somewhere else; c) I would be carrying some bankers cheque which I may not eventually use
So I am trying to get a sense of the following:
a)How to get a list of real auctions?
b)How do I establish that the auction listed is for real?
c)How do I establish contact with the lenders to get a sense on their reserve price before the auctions?
d)Finally, is there an inexpensive way to do title research to check liens, etc.?
Appreciate any inputs on these. Thanks