Looking to Learn from Experienced Auction Buyers

Phoenix, Arizona
Foreclosures
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Looking to Learn from Experienced Auction Buyers

Shayan Islam
Member since 2025 · 6 posts · 0 votes
Hey everyone,

New investor here! I currently work in the San Jose, CA metro area but grew up in Arizona, and lately I’ve been looking more seriously at wholesale and investment opportunities back home in AZ.

I’ve noticed that some of the best deals I come across seem to come from foreclosure auctions — a lot of them look extremely discounted compared to nearby comps and even show things like “Likely to sell faster than 97% of nearby homes” on Zillow.

That said, I’m aware there are some real risks — many of these auction listings are occupied, and some don’t allow interior inspections or tours, which makes due diligence tricky.

Since I don’t currently have any auction experts in my network, I’d love to hear from investors who have bought at auction before. I’d really appreciate any insight or resources you can share — or even connections to folks active in the Arizona auction scene, if you happen to have any. Thanks in advance!

- Shayan
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  • Dennis Fernandez
    Investor · Dallas, TX · Member since 2017 · 71 posts · 44 votes
    11mo

    Hello! We've been buying houses from various auction sources for years now and while I don't consider myself an expert because the majority of our houses come from wholesalers, we do occasionally buy from various auctions sites. 

    The biggest pitfall has got to be the limited due diligence and occupancy issues you mentioned. It's hard to evaluate the property condition off pictures or just a drive by, you can budget for a worse case scenario and most of the time end up okay. In my opinion the hardest part is actually having to evict the occupants. The easiest way to get the occupants to move out peacefully seems to be by offering a cash for keys and even offering to help them move. Most of the time the occupants are in some kind of a bind and typically can't even afford to move. Remember if the occupants turn out to be tenants with an effective lease in place then you have to honor that lease, so as long as they're paying and fulfilling their terms of the lease you can't really evict them, unless they like your cash for keys offer. If occupied I would budget some extra money for this cash for keys offer. 
    The second risk in my opinion is the title and the type of deed some auctions provide. The title is not always clear and auctions don't always provide a warranty deed that lenders and some buyers like to see. For example the in person auctions at the court house come with sheriff's deeds and we found it difficult to get title insurance thru our normal title provider. We also sometimes find that the properties have liens on them so we now run a quick title search before the auction and figure in the costs of paying off any liens into our max allowable offer. 

    I hope this helps out. There is plenty of opportunity in auctions, just make sure you know the risks involved in buying auctions in your county and state. 

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  • Shayan Islam
    OP
    Member since 2025 · 6 posts · 0 votes
    11mo
    Thanks!

    That was a very quick response, happy to see how active this community is :)

    I found myself along a similar path actually - starting with deals posted by wholesalers, then noticing foreclosures, and now finding myself looking at auctions. So far, I’ve mostly been looking at properties on Auction.com, but am open to hearing about other good sources of auction homes!

    I also agree that lack of due diligence and potential eviction are major risks, but you brought up some other really good points like title risk. I really appreciate your tips on offering cash for keys and running a quick title check to derisk liens—these are things I’ll absolutely factor in moving forward.

    One thing I’m still unsure about is the best way to get started in evaluating auction properties. Do you think it’s better to try to evaluate and bid on a property myself as a learning experience, or should I connect with a mentor who has auction experience to help me assess deals first so I can see how it’s done properly? If the latter, do you have any advice on where to find someone like that, especially in Arizona?

    Thanks again for sharing your insights—they’re super helpful as I figure out my next steps!
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  • Dennis Fernandez
    Investor · Dallas, TX · Member since 2017 · 71 posts · 44 votes
    11mo

    Honestly it's hard for me to say if you need a mentor or not, that is up to you. I don't know your experience level or what you know or don't know so I can't comment on that. I also don't buy houses in AZ so I have zero experience in that state. We only buy in TX, OK, AR, TN, AL, MS and MO.
    The way I look at auction houses is not that different than any other deal except you have to figure in some extra costs. I first review the sales and/or rent comps, next I review the property condition or get an estimated rehab budget, then I review any other costs such as eviction or liens, and finally I set myself a max offer price. By the time I'm bidding at the auction I have my numbers together and stick to that max offer number. 

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  • Shayan Islam
    OP
    Member since 2025 · 6 posts · 0 votes
    11mo

    That makes sense. If you don’t mind me asking, how do you usually handle reviewing a property’s condition when interior access isn’t allowed? Also, do any of the wholesalers you work with operate in AZ? If so, would you be open to sharing their contact info?

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