Buying at courthouse steps-Gwinnett County

14 Replies

I'm looking for some advice on buying a property at the courthouse steps in Lawrenceville on Tuesday.  I'm also looking for some insight on how properties go on and off the auction list.   I also understand that I'm not likely going to be able to buy at a price I'm comfortable paying. 

Anyway here is the story;

I glanced at Auction.com a couple of days ago and much to my surprise my first flip was listed.  The house is probably worth at least $20K more than when I flipped it three years ago.  So it is unlikely they are underwater, unless they refinanced or got a 2d mortgage of some type. 

Additionally, it looks like someone or some entity paid the property tax which were due in Oct. Also, I believe the property went up for auction back in Jun. I'm not sure what happened and why it has taken five months for it to come back to the courthouse steps. The initial opening price which is obviously very low to draw in buyers is about half of the ARV.

The house was in very good condition when I sold it three years ago.  Fannie Mae had repainted and recarpeted in their standard beige paint and carpet.   I did add tile to one of the bathrooms and upgraded the kitchen appliances (those may be gone?).  I also painted an accent wall where the fireplace is.  

The house as I remember is larger than most houses in the neighborhood but it is a little weird in its design.  Thus probably negating the extra sq ft in terms of resale value.  

I plan to stop by the house tomorrow and check to see if anyone is still living there. Ask the neighbors what they know and go by the courthouse and see if there are any other liens recorded against the property. I will also have someone check the MLS to see if the property was listed for sale or for rent since 2011.

If I can pick up this house for less than 130% of the initial bid estimate, then I should be doing quite well with it.  I'm only bringing a cashier's check for that amount so, that will limit my ability to buy at too high of a price or get caught up in the auction.

 Any other steps I should be taking?

Thanks!

Try to buy it before the sale, unless mortgages are too high. If you attempt this, make sure your title work is impeccable.

Unfortunately, I don't have any good advice or insight here...but if you buy it and resell it, I still have the staging and listing pictures from the first time around...  :-)

Originally posted by @Joseph Ball :

Try to buy it before the sale, unless mortgages are too high. If you attempt this, make sure your title work is impeccable.

 I'm pretty sure the mortgage(s) is/are higher than what I'm willing to pay.  

Originally posted by @J Scott:

Unfortunately, I don't have any good advice or insight here...but if you buy it and resell it, I still have the staging and listing pictures from the first time around...  :-)

 Thanks for reminding me about pics.  Carol sent me a bunch of them back then.  She certainly is a great stager and photographer!  Weirdly there are no kitchen pics, I'd bet that I wasn't quite done with the kitchen when she took the pictures, so no kitchen pics. 

Any Gwinnett based investors with words of wisdom?

Originally posted by @Joseph Ball :

Try to buy it before the sale, unless mortgages are too high. If you attempt this, make sure your title work is impeccable.

 Check Title, Check Title, Recheck Title.....

Just because you sold it to the person who is now in default doesn't mean it doesn't have current issues. Since the posted opening bid is so low are you sure it is the first trust deed that is going to sale? Are there IRS liens? Has anybody or any entity been quit claimed on title and brought some baggage with them?

Even though short sales are harder to pull off now, doesn't mean it can't be done and provide the margin that you are looking for.

Originally posted by @Ron Drake :
Originally posted by @Joseph Ball:

Try to buy it before the sale, unless mortgages are too high. If you attempt this, make sure your title work is impeccable.

 Check Title, Check Title, Recheck Title.....

Just because you sold it to the person who is now in default doesn't mean it doesn't have current issues. Since the posted opening bid is so low are you sure it is the first trust deed that is going to sale? Are there IRS liens? Has anybody or any entity been quit claimed on title and brought some baggage with them?

Even though short sales are harder to pull off now, doesn't mean it can't be done and provide the margin that you are looking for.

 This hasn't been listed for sale except via auction since I sold it in 2011.  Not sure what is going on with it.   I'm researching the title today.  

@Cal C.  

Did the property go up for sale? Did you buy it?

No I didn't get it.  There were two, at least, and I think there was a third very large investment company bidding along with some bidders for some medium sized companies.  Blackstone had a seat a few inches away from the auctioneer.  The Blackstone bidder was not going as high as some of the others but she was still bidding high.  

I struck up a conversation with the bidder for American homes 4 rent. He was paying retail (or above) for houses well located in nice s/d's. He showed me his sheet, maximum bid on my first flip house was $180K (about ARV). The max amount I was willing to pay was $120K. So I cut my day short. There was no way that my target house would have gone for anything near what I was willing to pay for it, even if he was lying (and somehow faked the sheet).

 It was a quixotic quest anyway.  

@Cal C. Sorry you didn't get this deal. I'm also looking to invest more in the Lawrenceville / Gwinnett area. What's the best place to get data for deals coming up on the Lawrenceville courthouse steps? Any good county websites you can point me to would be super helpful, thanks.

@Khuram Dhanani I live in Suwanee and have the same question. Have you found any good sources for foreclosures in Gwinnett?

Foreclosures have to be advertised prior to making it to the courthouse steps.  You can search for the latest notices along with the expected auction date using the website below.

https://www.georgiapublicnotice.com/

Auction.com will have a tent setup at the courthouse steps and then various law firms that also have homes to foreclose will show up and auction off their list.

If you want accurate pre foreclosure date- you can manually read Gwinnett Daily Post for the foreclosure advertising ( I forgot the day they publish it - you have to call them). I stopped  doing that as my eyes were about to pop out of my head, reading page after page of small print- just to find the street address.

 A MUCH better approach: buy the download spreadsheet at EquityDepot.com. They compile everything and match the street address with the tax records - so you know the debtor name, amount owed, tax appraised value, etc. Almost too much data on each house. Time is money - it costs $79 for the month for the downloadable spreadsheet, and $49 to keep the data on their server and you look at the data there. Takes me one hour to message the data into a useable Excel file, and come up with my "drive list". This way, I'm looking at exactly what I want, rather than spending days reading, and compiling a free list, to not know which house has any possible equity in it. 

The "bad" news:  I stopped buying at the auction after seeing exactly what @Cal C. said. Too many venture capital firms, hedge funds, and naive large investors bidding up to the "stupid level" buying homes "sight unseen" - never having been inside any house, and paying up to 90%+ of ARV. Wouldn't it be easier for these companies to place a 90% offer on every house in MLS? At least they can see the house inside, negotiate the seller to fix most items, and know what they are buying? They'll still be paying too much as an "investor", but at least it would reduce some of their repair expenses! My take on them...they don't care. It's not their money, and they assume all real estate will appreciate over time. They'll just sell the home next decade or two, and investors with the money they're investing in today won't know that they grossly overpaid back in 2017. For me...it's not a long term strategy to overpay, just to cash flow today. I bet the private investors that lent them all the money would not buy the same house they did, at the levels they bid for the house, sight unseen.

@Richard Balsam I couldn't agree more. I see it daily in the multi-family space. Way too many bad deals are taking place, simply because the money is coming from oversees and nobody knows where it's going. I see purchases in Clarkston for 75K per unit, nuts! Still better to send their money here rather than to invest in Shanghai or Toronto. I'm curious to see how it all plays out.

Cheers,

Damir 

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