Attended my first foreclosure auction...

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Today was my county foreclosure auction and tax lien sale... and I went for the first couple of hours, just to observe.

I thought I had done some solid research (I was wrong).  A couple weeks ago I got on the county site, and waded through the hundreds of pages of PDF documents that my county published.  I wrote down all the properties within the areas near me, and I drove around to look at them.  I was shocked to see that most of the houses I made note of were still occupied, even though the auction was only a few days away (scary to me).  

I showed up today with the 3 properties I'd be interested in watching, along with some basic info I thought I needed... address and my "max" number.  I was hoping just to know if my numbers were in the ballpark of these investors who know what they're doing.

I was really overwhelmed when I got there, because it turned out the tax lien auction was also set to kick off - which I didn't yet realize was different than the foreclosure auction (dumb newbie)... I was also confused when I saw all the "Auction.com" banners and tables everywhere.  Even more confusion when 10am came, and there were about 5 different auctions happening simultaneously.  I had no idea which auction would be auctioning off the 3 properties I was hoping to watch... I never did figure that out.  

I quickly realized that having the address was a waste of time - because everything was auctioned by "Lot and Block" which I hadn't written down (newbie mistake).  So, I jumped on the county site to find the lot and block of my 3 properties, but never did know which auction(s) would have them :(

Long story short, I think I learned a few things, but I'm left with SO MANY more questions...

  • What's the deal with Auction.com?  I tried to look at the site for my county, and they only had a hand-ful of properties listed, even though there were a couple hundred being auctioned off.
  • I saw lots of "lists" with Auction.com branding, but scoured their site and couldn't find them... Do they hand out lists at the auction and I missed them?
  • Whats the deal with the tax lien auction? (I'm already researching, but info here would be awesome)
  • How do I know which properties will be at which auction tables?  I think I figured out that each auction is the Trustee... but when I go back and look at the documents the county posted, there are like 500 different trustees.  They must be grouping them together somehow - I just don't know how...
  • Funding... It really blows my mind that many of these properties were going for 200-400k and people were just running to get a money order (it's due within the hour of the auction closing).  Are these investors just sitting with that kind of capital waiting for the auctions?  Is it likely personal/private money?  I assume you can't get Hard Money for these?

I'm sure I'll keep coming up with more questions as my mind settles down from the experience... wow.  I am going to try to do more research and be better prepared next month...  Any insight to this process would be amazing!

@Account Closed

I was hoping just to know if my numbers were in the ballpark of these investors who know what they're doing.

Well first of all I can tell you that, just because someone is bidding, even bidding with a ton of money, does NOT mean they know what they are doing. 

Are these investors just sitting with that kind of capital waiting for the auctions? Is it likely personal/private money? I assume you can't get Hard Money for these?

Money comes from all kinds of sources, personal wealth, private maney, partnerships, or big money like banks and hedge funds. Often people assume the big money like hedge funds must know what they are doing. i can tell you from years of experience at the Baltimore City sale that some of the big money doesn't have a clue what they are doing at tax sale.

Hi @Account Closed ,

Good for you!

They are good to experience a bunch of times before you are ready to put your money on the table. I would recommend going to one, finding out what it sold for, then reverse engineering that property. Do it again and again and you will start to come up with your own formula that works. What is it worth retail, what does it look like it needs from outside, how much is eviction if there is someone there, what is a base kitchen, baths, etc until you find a safe number. Once you do a bunch in reverse you will figure out what you can pay going forward and be competitive. 

Don't rush that step. As far as people running to get a money order, I am pretty sure they were not getting a full price one. IN our area it is 10% so if I bid 130K I would have to have a 13K money order and the balance in 30 days. So it;s not as rough as it seems. Of course your place will be different. It;s good to find what their requirements are and you will get that by hanging out and chatting. You will also find there are plenty of quiet people, but also tons who are not afraid to share their knowledge, chat with them.

Good Luck!