Buying a House at the Courthouse Steps: High Risk – High Reward

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“Are you gonna pull those pistols or whistle Dixie?”  The Outlaw Josey Wales faced four Union soldiers that had just walked out of the town saloon.  They had been chasing him across the countryside for months.  The soldiers knew that Josey Wales was a gunslinger – a cold blooded killer.  That’s why they were afraid to draw their pistols.  He sized each one of them up by reading their eyes and hands.  You see, Josey had been in this situation many times and he knew exactly what to do.

One of the cavalrymen finally worked up the nerve and drew his six shooter.  But before he could get it out of the holster Josey had gunned three of them down.  The fourth was shot by Josey’s riding companion, Lone Watie. 

As they rode off together Lone Watie asked his friend how he knew who was going to draw first.  Josey explained that the one in the center had his holster flapped and the other had scared eyes.  The solider on the left had crazy eyes – he knew he would draw first.  When Lone Watie asked what about the fourth shooter Josey replied, “I never paid him no mind, you were there!”

It should be obvious to you by now that I love westerns.  My favorite of all time is The Outlaw Josey Wales starring Clint Eastwood.  If this movie comes on (usually late at night on TNT) I can’t stop watching.  I have every line memorized.

When you hear the term gunslinger what do you think of?  Do the words impulsive, dangerous and reckless come to mind?  Josey Wales was none of those things.  He was quite the opposite – strategic, measured and careful.  Wales may have had to make quick decisions but he never made them impulsively and he always had a plan. 

courthouse steps auction

Buying a House at the Courthouse Steps

If you’re considering buying a house at the courthouse steps then you must adopt the gunslinger mentality.  That is, be strategic, measured and careful – but also possess the ability to make a quick decision.

Each day in Phoenix auctions (they are called trustee’s sales in Arizona) take place at the courthouse steps and in trustee’s offices at 10a, 11a, 12p, 12:30p and 2p.  On any given day there are as many as 500 homes or more that are sold. 

This week we bought three houses at trustee’s sales.  It may surprise you that I didn’t attend any of these auctions, nor did I ever see the inside of the houses (they were occupied).  As a matter of fact, I didn’t even drive by the properties.  Sounds impulsive, dangerous and reckless right?

Wrong.   Like the Outlaw Josey Wales our firm moves quickly and has a plan.  Here’s our strategy:

  1. We use an online bidding service,, that provides us with all of the trustee’s sale information, as well as title checks, up to date opening bid amounts, drive reports and comprehensive market analysis from tax records and the Arizona Regional Multiple Listing Service.  Their web-based program even allows us to watch the bids take place in real time.
  2. We only bid on newer single-family homes with a minimum of 3 bedrooms, 2 bathrooms and a 2 car garage and an acquisition price of 200K or less.  This makes sifting through the list of homes much more simple.  It shrinks down to about 10-15 properties a day with this criteria plugged into the system.
  3. We use a simple but effective formula to determine our bid amount.
  4. If we win a bid on a house that is occupied we make contact with the former owner and offer cash for keys while simultaneously starting the eviction process.

Buying a house at the courthouse steps is a high risk – high reward business model.  It requires a great deal of knowledge about the market you are in.  I have a Realtor friend that has been in the business for 15 years and he’d rather have a colonoscopy then buy a house without having time to inspect it.  The thought of it makes him sick to his stomach.  If you need time to “kick the tires” before you buy a property then this type of acquisition strategy won’t work.  You get hours, not days in this game.  However, if you have the gunslinger mentality and can pull the trigger quickly this could be for you.  Just don’t miss.

About Author

Marty (G+) is the Chief Financial Officer for Rising Sun Capital Group, LLC, a real estate investment firm based in Gilbert, AZ. His firm purchases homes at the courthouse steps and public REO auctions. They have two exit strategies, either fix and flip or seller financing.


  1. I absolutely loved this post, as I too love Westerns. And your point is absolutely solid. Wildly-successful high-risk decision making often happens in an instant, but it never happens without keen intelligence, confidence, and strategy.

  2. Jonathon Buder on

    I, too, enjoyed the post and I have a few questions for you.

    How is your fix-and-flip exit strategy holding up in today’s market in Phoenix? How long does it usually take you to sell a property, after pulling the trigger at the auction? Do you generally purchase with cash, or with hard money, private money, etc?

    I am located in an area (San Diego) that’s still very expensive and with my personal income it looks very difficult to either rent a property for positive cash flow, or eat holding costs until I can sell it when the average time on market is so long and not many people who would live in the low-end properties can qualify for a bank loan to purchase them.

    Luckily, Phoenix is just a 7 hour drive away and from what I can tell it’s an easier market to make money in right now, because the rents are high enough to create cash flow and the price of buying properties is so low.

    Any insight you have would be much appreciated.

    • Jonathon, we continue to have success fixing and flipping in the Phoenix market. While overall prices here are declining, demand remains very strong. In 2010 over 90,000 homes were sold in the greater Phoenix area. Our firm averages 70 days from acquistion at the auction to retail closing – we use a combination of cash and private money to buy our properties.

      If you have any other questions feel free to call me at 602-319-5391.

  3. Marty – Thanks for the post. I hate hearing stories from investors who simply weren’t prepared and got in over their head by chasing a property. If you plan ahead, set your limits, and pounce on those deals that scream at you, you’ll be far ahead of the next guy who in all likelyhood is working on emotion. Then again, even if you are prepared, buying a property sight unseen is a risky venture.

  4. I bought as house on the county courthouse steps here in Dallas back in April last year and just now just sold it for a $18,000 or 48% profit. It was my first time and it was scary as hell. I have learned a lot and will put that education to use on my next acquisition. My wife almost threw up when we bought it she was so nervous – LOL.

  5. Marty you have given some great and vital information. The home auction business has intrested me very much and I have been researching infromation on what to know when buying a house from an auction, so my questions are,
    1. What should I find out or what are the proper things to know about a home before biding on It.
    2. You know, you said that you have hours not days to research a home, so is it worth hireing an inspecter to inspect the property.
    3. How and/or Where to go to do a title check on a home.
    4. Please give me any other information that I would need to know about auctions at the courthouse and what I should know and do to secure a home from an auction.

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