Investor · Los Angeles County, CA · Member since 2012 · 962 posts · 279 votes
I've been to the court house steps and witnessed Auction buying here in Los Angeles.
So far it looks like you just show up with the cashiers check for the amount in full and make it out to the trustee. Is it as simple as this? I already have the checks ready. Any tips for this?
Anyone know why houses all the way in Bellflower are being auctioned an hour away in Pomona?
Also how do you look up liens? I suppose just have my realtor do this or work with a title company?
Do you generally get decent deals at foreclosure auctions? Of the properties I witnessed selling, they didn't sell for that great of a deal, but were slightly under what they would sell on the MLS. But I only saw a few sales. Also, a bunch of sales got postpond... anyone know what the deal is with that?
Thanks so much for any info, wold like to get some advice from some seasoned vet.
Best part about it is I met a fellow BIGGER POCKETS member there. Where you at bud?
Investor, Real Estate Agent · San Juan Capistrano, CA · Member since 2013 · 150 posts · 65 votes
12y
Hey Will,
We're at the Pomona trustee sales every day and have been going to LA Trustee sales for the last 5+ years. There are very few deals going to sale these days, today there was only 1 we were on and the opening bid came out too high. We're scraping by with about 3-4 per month.
What @Daniel Sanchez said about higher end properties is definitely true. We try to stay under $500k ARV. So we don't touch the higher end stuff. However, it does seem like when high end properties do go to sale, there are a few extra buyers that show up just for them.
As for the auctions going on at the same time, there are 9:00 9:30 10:00 10:30 and 11:00 sales all in that pomona courtyard. They all have different criers. Things used to be difficult when lots of deals were going to sale, but now with the volume it's pretty easy to keep an ear on all of them.
We make our cashiers checks out to ourselves, and then include a power of attorney when we endorse them over to the trustee
As to why it's in Pomona, my guess is because every other court house has kicked them out! haha they used to mainly be in Norwalk but they gave trustee sales the boot a year or two ago
To look up liens, call your title company's customer service line
Postponed for a number of reasons, BK is probably the most popular. Just means for whatever reason they're not taking it to sale that day. probably 90% of the deals scheduled to go to sale are postponed or canceled
Beverly Hills, CA · Member since 2014 · 67 posts · 14 votes
12y
Hi Will,
I was a part of a Bona Fide purchaser for the better part of 3 years after the housing debacle. We would have people at all the LA County courthouses bidding up deals at the scheduled times they would go to auction. The spread on deals these days is not optimal for properties under $1mil. The real opportunity is more apparent in the higher dollar category, where less buyers are shopping. These days the competition on deals is immense, and most properties are not making it to auction due to new regulations offering assistance to prevent foreclosures.
Banks are not taking homes to sale as often as a few years ago, and it is a lot better to see that indicator to use for another potential method of acquiring deals. If you're trying to be a small time flipper, it may be rather hard to make it in this current market climate.
Investor · Los Angeles County, CA · Member since 2012 · 962 posts · 279 votes
12y
Thanks, yes I witnessed how much competition there was. People were bidding up properties...I don't even think they were getting deals really.
I also noticed there were several auctions happening simultaneously. What's the deal with that?
How about deals in the $500k-650k range? I saw a couple sell and when they got into the 500k+ range you physically saw less buyers
I'm not even looking for that great of a spread at this point but I suppose I could get burned with some liens or a terrible inside property condition?
Thanks, yes I witnessed how much competition there was. People were bidding up properties...I don't even think they were getting deals really.
I also noticed there were several auctions happening simultaneously. What's the deal with that?
How about deals in the $500k-650k range? I saw a couple sell and when they got into the 500k+ range you physically saw less buyers
I'm not even looking for that great of a spread at this point but I suppose I could get burned with some liens or a terrible inside property condition?
The trick to to get an idea of what's going to sale that day or for a few days in advance and just skip over the useless banter. We had a great advantage to offer our clients because we tracked every potential property heading to auction and did our own investigation when scrubbing each deal.
If you're interested, I can intro you to the BFP I was with and maybe you guys can discuss some opportunities.
Investor, Real Estate Agent · San Juan Capistrano, CA · Member since 2013 · 150 posts · 65 votes
12y
Hey Will,
We're at the Pomona trustee sales every day and have been going to LA Trustee sales for the last 5+ years. There are very few deals going to sale these days, today there was only 1 we were on and the opening bid came out too high. We're scraping by with about 3-4 per month.
What @Daniel Sanchez said about higher end properties is definitely true. We try to stay under $500k ARV. So we don't touch the higher end stuff. However, it does seem like when high end properties do go to sale, there are a few extra buyers that show up just for them.
As for the auctions going on at the same time, there are 9:00 9:30 10:00 10:30 and 11:00 sales all in that pomona courtyard. They all have different criers. Things used to be difficult when lots of deals were going to sale, but now with the volume it's pretty easy to keep an ear on all of them.
We make our cashiers checks out to ourselves, and then include a power of attorney when we endorse them over to the trustee
As to why it's in Pomona, my guess is because every other court house has kicked them out! haha they used to mainly be in Norwalk but they gave trustee sales the boot a year or two ago
To look up liens, call your title company's customer service line
Postponed for a number of reasons, BK is probably the most popular. Just means for whatever reason they're not taking it to sale that day. probably 90% of the deals scheduled to go to sale are postponed or canceled
Involved In Real Estate · Riverside, CA · Member since 2014 · 10 posts · 2 votes
12y
Hi Will,
All suggestions above are correct. We too appear at the Pomona auction along with Riverside and San Bernardino. We are finding it more difficult to purchase at the court steps but we still manage to purchase 30-50 properties a month. Margins have definitely slipped over the past few years too. With respect to liens, having a title company underwrite the property beforehand is idea because you will get burned if the lien is significant enough. I focus primarily with post foreclosure lien resolutions and they can get pretty hairy. Should you have questions in the future about lien resolutions, feel free to contact me. Best of luck in you efforts to purchase.
Investor · Oxnard, CA · Member since 2014 · 438 posts · 187 votes
12y
I was following this thread and had a couple of questions for the group. Are most of you looking for properties to rehab or buy and hold at auctions? As a newbie, I don’t plan on participating in auctions until I gain more experience as the idea of purchasing a property to rehab without doing a walk-through seems way too dangerous for my level.
we underwrite the properties in house days prior or the day of the auction (title search, run comps, sight property for repair budget etc). we also use proprietary software which allows us to bid up to a marginal cap so that we don't fall below a certain margin. Properties are then monitored in inventory (occupied, under renovation, listed, escrow) lots of moving parts to make it work.
Stevenson Ranch, CA · Member since 2015 · 25 posts · 8 votes
11y
@Bill Larsen, what about the auction premium? I know Norwalk ballroom auction charges you 5% premium of winning price, is it the same in Pomona auction?
Investor · Los Angeles, CA · Member since 2012 · 8 posts · 0 votes
10y
how much money do you have to bring to the auction in Pamona? is there a percentage of the purchase price? 10, 20, 30% ?? or do you have to have a cashier's check for the total purchase price?
Investor · Los Angeles County, CA · Member since 2012 · 962 posts · 279 votes
9y
Hi guys I originally posted this thread 3 years ago. I've done several SFR flips and purchased other types of property since then. Most sourced off the MLS, short sales or from direct marketing.
I'm considering doing a trustee / foreclosure auction again even knowing that it's most likely slimmer pickings. Has anyone done the Auction.com foreclosure/ trustee auctions?
What do they sell for compared to market sales?
It might make sense to me to purchase a house in a farm area that I know values well because I know the potential value of houses and can make a purchase without full due-dilligence (assuming my price factors in all possibilities)
Is anyone familiar with the Auction sales at the Doubletree hotel in LA? :Double tree auction.com
Hi Will, I'm not familiar with the Auction sales that take place at the Doubletree hotel, however I was planning to go to the auction scheduled for tomorrow, June 12th, 2017. I checked auction.com this evening, only to find the Doubletree auction has been postponed. A bit disappointing, being that this was going to be my very first time attending an auction.
I have several properties I've visited that I will likely bid on if I can't try to reinstate a loan or make a direct offer to the current owner prior to the auction. That is if there is enough equity in the property for me to make an offer to pay off the loan and the owner to make everyone happy.
San Gabriel, CA · Member since 2017 · 20 posts · 7 votes
9y
I went to the Doubletree foreclosure by auction.com last week 6/8/17. There were a total of only 7 to 8 properties that made it to auction, the rest of the scheduled ones (50+) to auction off were "postponed", with a handful "cancelled". The room was full, all seats were taken, with a few ppl standing on the side. From talking to the person sat next to me, she said there were the usual big bidders and some from investment groups. Overall, less than 5% of the ppl in the room bid, and the properties were bid up so high they were about equal to market price. For small investors like myself, slim to none is what I learned from attending my first L.A. foreclosure auction.
I am off to the San Bernardino auction tomorrow 6/13. The general SB property value is lower than LA's so I am hoping the bidding will be lower as well.
BTW, there's free coffee and free auction seminars offered by auction.com to help new investors that want to learn the foreclosure auction process.
Investor · Los Angeles County, CA · Member since 2012 · 962 posts · 279 votes
9y
Gotcha Rick, Thank you. That's good to know. So only 7/50 went to auction. Do you know if those were underwater or did they have equity? When you say equal to market price, were they market price for rehab or fixer properties?
I'm not looking for the buy of the century, especially in this market. I'm just looking for about 70-75% ARV.
San Gabriel, CA · Member since 2017 · 20 posts · 7 votes
9y
Will, as I recall the starting bids were quite high so that means the properties were pretty much underwater, if that's how one determines it? since I'm a newbie at this, the final winning bid prices were all pretty much what you would see in the MLS to the other comparable prices. I suspect it'd be hard for someone to rehab it and make a decent profit. It's quite of a risk to pay that much and unable to see the inside of the properties.
auction.com foreclosure bidding comes up pretty often. They also offer free foreclosure bidding seminars. They'll teach you the whole bidding process and provide answers to all of your questions on foreclosure bidding. There's a title person there that'll show you due diligence on what and how on searching titles, such as possible extra baggage that comes with these properties like liens and 2nd mortgages and etc. Hope this helps.
Surveyor · Hemet, CA · Member since 2015 · 797 posts · 112 votes
9y
@Will F. I will have some commercial property for sale soon this year sometime in corona California. I am hosting a open house open office I should say this year sometime if you and your friends are interested. 3 unit office and one unit is empty and the others are on month to month lease. Robin
San Gabriel, CA · Member since 2017 · 20 posts · 7 votes
8y
@Joseph M. I have put real estate investing on pause recently due to my wife and I now have a newborn baby :) However, the last time I was at the San Bernardino auction.com's auctions, they were during the summer months, I can honestly say they were slim pickings for investors to make a profit. For the majority of the bids, they all ended with just about retail price. I even teamed up with my bro-in-law to pool our finances together in hopes to land a deal. None of the bids made sense to us to go after :(
Rental Property Investor · Dallas, TX · Member since 2015 · 9 posts · 2 votes
7y
Hi all, thanks for information provided in the thread. Just a question on California law and Auction.com, when they stipulate Est. Debt (amount owed by borrower); is this amount transferred to new buyer or does this get waived (I assume this is mortgage debt on the property)?
I am trying to figure out if I win the bid on the house that this is the only cost I pay for the property and it gets transferred to my name or are there other ride along conditions I need to be aware of (I am new to auctions so trying to get a better idea)?
Hi Kyle there are a host of other potential expenses once you buy, a key one being the ejectment of the former owner or tenant of the property your purchase. In California any occupant of the property must be evicted pursuant to the State's unlawful detainer laws unless you can pay them to on their own. If a "UD" action is necessary I'd recommend hiring an attorney to do so since there are many traps for the unwary.
Other subsequent and additional expenses can include things like hidden liens, fix up costs, marketing costs, title and document recording, insurance etc. Think of it like owning any property. Hope that helps.