Hello BP, newbie looking to buy my first property. I live and work in the Tampa Bay area. Been looking at the Hillsborough county foreclosure auctions and was wondering if anyone has any advice, insight, experience into this arena? Seems to me that the banks are primarily buying back these properties. Does this create an opportunity to then purchase these as REOs? If so, what's the best approach.
Thanks in advance for any responses.
Hi Chet, welcome. I live and work north of you in Pasco county and yes, the banks usually get them at the foreclosure auctions. Then it can take them a long time to actually get them on the market. They aren't just giving away the "junkers" any more. Often they get them cleaned up and painted. I've even seen new roofs and carpet in some cases (usually higher end properties.) It is getting harder to get good deals on REOs but they are still out there if you're persistent. I am licensed and might be able to help. I'll PM you with my information.
More and More Banks and other mortgage holders are marketing their REO's and other foreclosure properties as close to market prices as they can get and its proving harder and harder to find great deals. Yes maybe as always there may be one or two great deals out there because its in the interest of the sellers to motivate buyers to come to Foreclosure sales but over all I would say that its not really worth all the running around and dealing with the increased competition which is really the source of increasing prices at those sales.
What is happening now days is that Banks assign their inventory of foreclosed properties to agents with them having the last word on approval of the offers. Of course being agents they earn a commission on the sales so its in their best interests to get the highest price possible and the banks are not accepting too many low ball offers. You might consider what are called absolute auctions which means the properties are going to sell one way or the other even if they only get one bid.
Everyone knows about foreclosures and that is the first place many think of going to so they can buy a property significantly below market so there is more and more competition at the sales and those with the cash will be winners of the bidding every time. No one can say what the outcome of a bidding will be but I myself see it as a lost effort where even if I do win a bid it I will not get a property at a good enough price to make it worth the entire effort but its up to you if you really want to pursue this method of buying properties. Like Lisa said above there is always a chance of getting a property at a good price if you are persistent.
Yeah, in 2009 banks were "motivated sellers" and we were doing a lot of short sales. In 2015, banks are getting market value and have very little motivation to deeply discount their REOs.
You really don't want houses AFTER foreclosure (that's the problem you've seen here). You want to try to save the homeowner who is in pre-foreclosure. And of those, you really only want to deal with sellers who have substantial equity.
Welcome to BP. As the guys above were saying, it can be very difficult to secure a deal at auctions in the Tampa Bay area these days. It´s a very competitive market and the low hanging fruit is long gone.
To be honest, auctions in general can be a pretty risky way for a beginner to jump in as there are a lot of pitfalls (buying sight unseen, previous liens attached etc).
Have you considered latching onto a local investor or wholesaler and learning the business from them? If you´re willing to do the hard work (bird dogging, painting etc) you might find someone who can teach you more in 6 months than you´d learn in 2 years by yourself.
Either way, IÂ´d recommend going to a few networking REIA events - there are lots of them in Tampa and people are always happy to hear from and give advice to new investors.
@Chet Jennings welcome to BP! I agree with everyone above. To touch on the local meet ups check meetup.com and search for REIA. There are many good ones in Tampa. I look forward to seeing you at them.
I agree with some of the posts here that it is becoming more difficult to find properties at auctions, but it is still possible. I have been using http://www.auctiontumbler.com which posts the up to date auction information. Currently covers Tampa, Pasco and Sarasota county. That would be a good starting point
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