Hello Biggerpockets community, I had a quick question for anyone with more experience with REO and foreclosure listings. I recently found a Duplex 2 unit building in a great area and in need of cosmetic work from the outside and have no clue about the inside. I was told it was tenant occupied and i could not see the inside, Was sold as is, where is. There are no inspection or financing contingencies and the value was said to be $155,000 for the building. I currently have most of my cash tied up in other investment flips and don't have the cash to buy but can easily get a loan for the building after purchasing it Any advice or ideas on how to purchase such a building? It was listed nationwide on an auction website and I really hate to pass this deal up. Auction started today and only a few more days left. Would greatly appreciate any help. Thank you for reading.
I would assume the interior needs a complete rehab and figure that into my costs.
Further, you need to set the "maximum" price you will pay for it based on market value, closing costs, and any rehab costs. Keep in mind that on some of these auctions, the bank has the right to bid against you. That's right, they can artificially drive up price to get what they want. Then mysteriously, a day or two later, the property in run through the auction again. So keep firm on your maximum.
I never did like auctions for the aforementioned reason and that sometimes you are bidding against people who do not have the means to buy it, so in my opinion, are just placing more faux bids. You can also add in first time investors/homeowners who may over bid it due to emotion in the process, emotion on the property, and have not counted the correct rehab costs. Sometimes due to this emotion, there are bidding wars, resulting in a price that is just too expensive.
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