Looking for homes in and around Phoenix, Arizona. Prices are high in this area and I think I will have better luck finding a cash flowing property with foreclosure homes. Many homes are going to auction however and so I'm wondering if auctions are a useful/common place to find well priced homes or if I should stick to bank owned properties that have a set asking price. I am looking for my first rental property at this time, very new to the world of real estate investing. Thank you in advance for any help!
Buying at auction typically requires all cash and offers no opportunity to get in the property prior to owning it. Its a gamble. For your first property I would want to have a chance to inspect it. For that I would stick to REO properties to start.
@Jake Gandolfo . What Ray said
@Jake Gandolfo Buying at auction is a risky affair and probably not appropriate for your first deal. The properties are sold drive by only, as-is, where-is, no inspections, no guarantees, and the full cash payment is due by 5 pm the next business day. You often do not even get keys to the property!
I did very well with a couple auction properties back in 2012 and 2013, but I think those days are long gone. There is tremendous competition in the trustee sale space, and some of the bigger buyers (even institutional) are able to work on thinner margins and thus bid higher.
Buying REO property from a bank is a better option, however there aren't nearly as many bank owned properties on the market as there were after the crash.