Foreclosure/Auction Deal

5 Replies

Hi BP friends, 

I need some advice about a house going to auction in my neighborhood. I am a landlord for 2 properties and am looking for another, although for my next one I will have to use cash (HELOC) in my residence to buy a rental. So I have to be very careful and sure of a return so I can cash out/refi to put HELOC money back.

Again, I want to be VERY conservative in my first HELOC deal.

The house is a 4 BR 1.5 Bth. I live in a mixed income city, but this street is mostly working professionals, and the house comps out at around 170-190k. The house is going up for auction next week starting at 60k.  I took a walk over there to take a closer look. 

As it happened, the guy renting the place came outside. He wasn't terribly friendly and he had a lot of tattoos and no teeth.  He did say that the owner was a bum and that the interior needed "a lot of work" including a new boiler.  He said he was renting for $1200 and that the landlord had reduced his rent from $1400.  He told me there was hardwood on the floors and he really didn't want to talk much further.  

I was surprised to see this type of renter in the house given that the street is very nice and I know a lot of people who live on it. Then again, this is a mixed city and you get all types. 

I tell you, I was tempted to offer him fifty bucks to let me inside and am still considering this. What do you BP folks think of that?! Will I be writing my next BP post from behind the bars of our county jail? 

This house appeals to me because I know the neighborhood and the house looks decent on the outside. I guess it's silly of me to think of doing my first investment property from auction, but I can't help but feel fascinated by this house.  If I could be 100k all in and refi at 200k, wouldn't I then clear 100 in profit, give or take? Obviously these are the roughest of numbers.  And of course this assumes I can get the house for 60k and that it only needs 40k in work.  

Just wondering what you guys thought.  Here's a link to the house in question.  And I thank you all in advance for reading.  Best, Amy

https://www.auction.com/new-york/residential-aucti...

Do Not Disturb Occupant

It is a criminal offense to trespass on this property

That is the warning on auction.com website.Also you will be surprised at the number of bidders that come out and you would very  lucky to get it for $60k  and these are the recent sales

Address Distance Property Type Sold price Sold date Bed Bath Sqft
68 Lucas Ave, Kingston NY 0.05 Single-Family Home $66,250 12/10/14 3 2.5 1,525
30 Navara St, Kingston NY 0.65 Single-Family Home $80,000 03/04/15 2 1 823
17 Klingberg Ave, Kingston NY 0.93 Single-Family Home $57,000 05/27/15 2 1 1,056
208 Downs St, Kingston NY 1.34 Single-Family Home $65,000 05/18/15 3 1 993
65 Flatbush Ave, Kingston NY 1.41 Single-Family Home $65,000 01/02/15 3 1 1,590
34 Andrew St, Kingston NY 1.61 Single-Family Home $79,000 01/02/15 3 1 1,273
12 Clarendon Ave, Kingston NY 1.65 Single-Family Home $54,000 01/13/15 1 1 529
20 Brewster St, Kingston NY 1.69 Single-Family Home $61,100 01/22/15 3 1 1,500
29 W Chester St, Kingston NY 1.76 Single-Family Home $51,000 05/07/15 3 1 1,468
132 1st Ave, Kingston NY 2.24 Single-Family Home $62,000 06/02/15 2 1 740

Just realize that the "starting bid" is a low ball teaser, irrelevant number.  The bank has a reserve price that is undisclosed, and expect the house to go for well over $100k, and the bank may still not accept it.

Thank you for your swift responses!  

To Steven Picker -- I did drive up on the driveway to see the house.  But I didn't disturb the renter.  He came out to talk to me.  Is that okay?  

Those recent sales are sobering.  But those homes are not close to the one I'm talking about -- they are in other more financially challenged neighborhoods.  How did you acquire that data so quickly?  I'm impressed.  

To Wayne Brooks -- I've gone to many auctions at the courthouse and yes, it's true, there is always a bank rep there who comes in with a much higher starting bid.  And houses always, as far as I've seen (and I go often) go right back to the bank.  

I guess the point is to stay away, then?  

Thank you in advance...

@Amy Zemser How did the Auction.com deal work out? Did you bid on the property? According to Zillow.com it sold for 73k.

Originally posted by @Steven Picker :

Do Not Disturb Occupant

It is a criminal offense to trespass on this property

That is the warning on auction.com website.Also you will be surprised at the number of bidders that come out and you would very  lucky to get it for $60k  and these are the recent sales

Address Distance Property Type Sold price Sold date Bed Bath Sqft
68 Lucas Ave, Kingston NY 0.05 Single-Family Home $66,250 12/10/14 3 2.5 1,525
30 Navara St, Kingston NY 0.65 Single-Family Home $80,000 03/04/15 2 1 823
17 Klingberg Ave, Kingston NY 0.93 Single-Family Home $57,000 05/27/15 2 1 1,056
208 Downs St, Kingston NY 1.34 Single-Family Home $65,000 05/18/15 3 1 993
65 Flatbush Ave, Kingston NY 1.41 Single-Family Home $65,000 01/02/15 3 1 1,590
34 Andrew St, Kingston NY 1.61 Single-Family Home $79,000 01/02/15 3 1 1,273
12 Clarendon Ave, Kingston NY 1.65 Single-Family Home $54,000 01/13/15 1 1 529
20 Brewster St, Kingston NY 1.69 Single-Family Home $61,100 01/22/15 3 1 1,500
29 W Chester St, Kingston NY 1.76 Single-Family Home $51,000 05/07/15 3 1 1,468
132 1st Ave, Kingston NY 2.24 Single-Family Home $62,000 06/02/15 2 1 740

 Hi there, was this information on auction.com and how did you pull up this list? I know this was an old post but i'm currently debating if I should go the auction route or stick with a realtor. Thank you!

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