Tricks to asses the probability an auction.com property goes

5 Replies

There is a property I am interested in from auction.com in San Diego.

I am considering booking a flight since I live out of state and I know auctions are often canceled so I am worried about wasting the effort.

On the other hand, this is the most interesting property I have found in the three years I have been watching.

To give everyone a sense, I would go to the auction if the odds are greater than 10% that I will have a chance to bid. 

Are there any tricks or techniques to estimate this probability? 

I recently looked at a San Diego tax lien auction.  We identified around 10 properties that we looked at and got down to 5 that we would be willing to bid on.  Only one of the 5 went to auction (we were not the winning bid).  A few of the ones we eliminated went to bid but they all had significant issues beyond rehab type issues (issues that could not be resolved).  My view is that a small percentage of properties that are normal (nothing that cannot be addressed wrong with it) make to the auction.

I do not believe there is any method to know which RE will be pulled prior to auction.  However, maybe you can infer the likelihood of the RE going to auction from my last sample but a sample of one is a small sample set.

Good luck

Originally posted by @Dan Heuschele :

I recently looked at a San Diego tax lien auction.  We identified around 10 properties that we looked at and got down to 5 that we would be willing to bid on.  Only one of the 5 went to auction (we were not the winning bid).  A few of the ones we eliminated went to bid but they all had significant issues beyond rehab type issues (issues that could not be resolved).  My view is that a small percentage of properties that are normal (nothing that cannot be addressed wrong with it) make to the auction.

I do not believe there is any method to know which RE will be pulled prior to auction.  However, maybe you can infer the likelihood of the RE going to auction from my last sample but a sample of one is a small sample set.

Good luck

Im interested in looking into Auctions ...and auctions.com as well.   Never done it before.    How are Tax Lien Auctions different from those properties on Auctions.com?   Your response got me concerned that its a huge gamble and not worth the effort or risk.    Just out of curiousity.... what exactly was that “significant issues beyond rehab type that could not be resolved”?   And how common are these types of issues? And why would anyone buy these types of properties?

@Kevin B. No way to know the odds of it actually being auctioned or what price it may bring.  Also, I’ve never believed it was smart to be buying courthouse auctions at a distance....the local investors have much better local knowledge than you.....if you outbid them, there is likely not a good reason for it.

Originally posted by @Alvin Uy :
Originally posted by @Dan Heuschele:

I recently looked at a San Diego tax lien auction.  We identified around 10 properties that we looked at and got down to 5 that we would be willing to bid on.  Only one of the 5 went to auction (we were not the winning bid).  A few of the ones we eliminated went to bid but they all had significant issues beyond rehab type issues (issues that could not be resolved).  My view is that a small percentage of properties that are normal (nothing that cannot be addressed wrong with it) make to the auction.

I do not believe there is any method to know which RE will be pulled prior to auction.  However, maybe you can infer the likelihood of the RE going to auction from my last sample but a sample of one is a small sample set.

Good luck

Im interested in looking into Auctions ...and auctions.com as well.   Never done it before.    How are Tax Lien Auctions different from those properties on Auctions.com?   Your response got me concerned that its a huge gamble and not worth the effort or risk.    Just out of curiousity.... what exactly was that “significant issues beyond rehab type that could not be resolved”?   And how common are these types of issues? And why would anyone buy these types of properties?

 I will discuss two properties that were a mile or so apart.  

Property 1 was a wreck of a small (<400’) structure (would not necessarily scare us off), above Hwy163 (again would not necessarily scare us off), with most of the lot on a very steep slope so even placing the little structure on it was a challenge. 

Property 2 shared a walk with a different property and the two properties had at some point merged.  The property not for sale had a door to the roof of the property for sale with a deck with patio furniture on it.  

A property in a totally different area (Vista) had questionable access to the property.  Our search could not show any recorded easement to the property.  

Most of the normal properties were pulled prior to auction but we bid on a property that was a little too remote for us to bid too price but sold at a price that an experienced flipper should be able to turn a fine profit.  It was one of the few normal properties that was not pulled.  

Good luck

Originally posted by @Dan Heuschele :
Originally posted by @Alvin Uy:
Originally posted by @Dan Heuschele:

I recently looked at a San Diego tax lien auction.  We identified around 10 properties that we looked at and got down to 5 that we would be willing to bid on.  Only one of the 5 went to auction (we were not the winning bid).  A few of the ones we eliminated went to bid but they all had significant issues beyond rehab type issues (issues that could not be resolved).  My view is that a small percentage of properties that are normal (nothing that cannot be addressed wrong with it) make to the auction.

I do not believe there is any method to know which RE will be pulled prior to auction.  However, maybe you can infer the likelihood of the RE going to auction from my last sample but a sample of one is a small sample set.

Good luck

Im interested in looking into Auctions ...and auctions.com as well.   Never done it before.    How are Tax Lien Auctions different from those properties on Auctions.com?   Your response got me concerned that its a huge gamble and not worth the effort or risk.    Just out of curiousity.... what exactly was that “significant issues beyond rehab type that could not be resolved”?   And how common are these types of issues? And why would anyone buy these types of properties?

 I will discuss two properties that were a mile or so apart.  

Property 1 was a wreck of a small (<400’) structure (would not necessarily scare us off), above Hwy163 (again would not necessarily scare us off), with most of the lot on a very steep slope so even placing the little structure on it was a challenge. 

Property 2 shared a walk with a different property and the two properties had at some point merged.  The property not for sale had a door to the roof of the property for sale with a deck with patio furniture on it.  

A property in a totally different area (Vista) had questionable access to the property.  Our search could not show any recorded easement to the property.  

Most of the normal properties were pulled prior to auction but we bid on a property that was a little too remote for us to bid too price but sold at a price that an experienced flipper should be able to turn a fine profit.  It was one of the few normal properties that was not pulled.  

Good luck

Thanks for the details.... Definitely sounds like its not for everyone. Glad you were able to identify those issues ahead of time. I literally just walked away from a similar deal to your Property#1 last week (although its an MLS, not an auction deal). A very small tear down 1/1 SFR on Hillside 14k sqft lot on a beautiful hillside views... surrounded by million dollar homes. Worse house on a very desirable neighborhood. Similar situation, it look good on paper basically paying for land value... I almost thought I hit the lottery on this one. A third of the lot was flat before a very steep drop off. The plan was to tear it down and build a high end home... and flip that would yield $300-$400k net. The day I was going to remove all contingencies, my contractor while sending plans to the city found out that ground soil the exist house was build on was basically back filled decades ago so it was not conforming to todays standards. Building and Safety requirements included having several pylons place with roughly 25-30ft each just to reach bedrock.. plus hillside retaining walls. Just to get permits for pylons and retaining walls will take 8-10mos... plus roughly $100k just for that. I had to walk away... Glad angels were watching me that day.