Auction Rules Give Me Blues

5 Replies

I recently was looking at properties going up for Auction and came across a duplex up for auction at 10k, with tennants already there.

Then underneath the listing it said "No conventional loans."

Are there any other rules you have to follow when trying to buy an auction property? Or was this just a one time thing? 

there are many kinds of auctions but most will state the funding rules.. and if one of them is cash only then thats what it is.. plus here are NO lenders that do 10k and under loans.. :)  other than you mom and dad

Originally posted by @Jay Hinrichs :

there are many kinds of auctions but most will state the funding rules.. and if one of them is cash only then thats what it is.. plus here are NO lenders that do 10k and under loans.. :)  other than you mom and dad

 So, since the listing said no conventional loans, do you think they would have accepted other types of finance?

Thanks for responding!

maybe HML but at those price points i am thinking cash and carry.. literally NO one makes loans that small

like I said other than friends or familys.. heck the foreclsoure cost could exceed the asset value.

@Taylor Nunn
Taylor I have bought a few properties at auction and cash means cash / cash available as most of the properties won’t qualify for what would be considered “ normal “ financing and as Jay mentioned it just doesn’t work under around 50k for hml . Basically the banks selling properties don’t want to wait for the time it takes to arrange financing so they default to “ no financing”. My advice for what it is worth if your going to buy these type of properties is to have at least double the price available in cash because more often than not there will be significant costs to get a “ rented” property truly functioning. I have a dozen of these “ pigs” and it works for me but please don’t go into cheap properties with the illusion that they stay that way.

BTW, that is the “starting bid”, not a reserve. It’s typically just s teaser low ball number to get you interested. Don’t expect it sell for that.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.