Foreclosure Auction – Numbers Don’t Show Huge Spread. What Am I Missing?

Question

Hi BP community,

I’m looking for input from investors who regularly buy at judicial foreclosure auctions, especially in the Midwest.

I’ve been analyzing a sheriff sale in OK, and I’m struggling to see how investors generate strong returns at auction unless they win at very low prices. I’d appreciate insight into what I might be missing and how auctions tend to work in investors’ favor.

Here are the actual numbers from the foreclosure documents:

• Original loan (2017): $231,234

• Interest rate: 4.00%

• Monthly payment: $1,103

• Default since: Aug 2022

• Amount due per court filing (2023): ~$208,735 + interest + fees

• County appraised value (sheriff list): $310,000

• My conservative ARV (recent comps): $300k–315k

• Property: 3 bed / 2 bath, ~1,987 sqft

• Occupied at time of foreclosure

• Auction Date: 01/07/2026

I’m interested in understanding what a best-case versus realistic outcome would be here. For experienced auction investors, how would you approach bidding on a property like this, and what factors would most influence your maximum bid?

Jay Hinrichs · Answer

also keep in mind only about 1 in 20 to 30 posted foreclosures actually go to sale.. they get bought pre foreclsosure as@Kerry Noble Jr mentioned or the note gets modified or owner files a BK day before auction. the opening bid many times is not known until a day or two before the sale it could go up substantially and folks wonder why.. well if there is PMI the bank is going to get paid out regardless.. And or there are other accounting issues for them.. Or they could do a drop bid and bring and publish an opening bid way below the amount in the documents only to have the bid raised a ton if anyone bids on it.. To actually in most markets to buy at trustee or sherrif sales you have to be tracking 20 to 50 properties with the hopes that ONE will work.. I did this business for 5 straight years and there is a lot of moving parts and I finally took my cash and credit and opened a HML company far easier and more profitable than chasing court house steps.

Kerry Noble Jr · Answer

get it BEFORE the auction and try a subject-To

Bruce Woodruff · Answer

You're right....you need to get these at rock bottom prices to do well on ROI. Everything is about price. I wouldn't recommend this for a newbie, just go find a distressed house in an up-and-coming neighborhood, buy it/fix it up/sell it...

Jay Hinrichs · Answer

West coast foreclosures almost never would pencil as a rental its all fix and flip retail .

Plus if your competing with those that want to live in the home there is no way us investor win those auctions unless the other bidder did not bring enough money

Mike Kirby · Answer

@Jay HinrichsI have bought 6 of my last 7 rental houses at the courthouse steps but I haven't bought one since 2022 because of all the "investors" that think bidding a property up to retail value or more is the way to win the game. Totally unbelievable what people overpay for and act like they just won the lottery when in fact they won't see a profit for ten years...

Foreclosure Auction – Numbers Don’t Show Huge Spread. What Am I Missing?

Foreclosure Auction – Numbers Don’t Show Huge Spread. What Am I Missing?

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