Auctions and setting limits
When purchasing homes at foreclosure auction, investors/end users are not able to do due diligance until after purchase. Is there a formula (along with fervent prayer) for setting limits to the amount one will bid on each house (i.e. calculating costs such as rehab when the house cannot be inspected)?
The reality is you can do some DD before the auction. There are many educated assumptions you can make during a site visit. That along with property card details and discussions with neighbors can sometimes make your knowledgeable low bid a lucrative proposition.
The morning of the auction I drive by all properties that I am interested in. I look for cracked bricks/mortar on exterior, missing condenser, roof condition, yard, etc. This will give me a general idea of what work is needed on exterior and help with what I can find on interior once I get access. I do not go over minimum prices paid on homes in that area for the past year. I use MLS to establish this price. You will find some homes are unlocked so I do what is necessary to give me a leg up. Always assume you will need paint and all new flooring.
Best of Luck!
