Just won my FIRST Auction!

Foreclosures
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Just won my FIRST Auction!

Pavlos Kasselouris
Project Engineer · Miami Beach, FL · Member since 2015 · 203 posts · 64 votes

I'm so excited a new chapter just opened in my REI career! This was always in my mind, and after 3 months of going after auctions, I landed my first acquisition! For the record I have 3 rentals out of which one was a rehab.

My goal is to flip it, and go for the next one! Before I scale this venture I wanted to have one completed project from start to finish, and then seek financing for more rehabs. This one is a joint venture with my partner and we are self funding the deal.

I will post updates here and ask for advice at the same time.

Acquisition cost is $75K + fees of about $1700.

My initial calculated ARV was around 125K, but after we won the auction I did more detailed CMA that came 133K. So listing price should be around 135K.

Its a 3/2/2 with 1416 sqft in Florida, 30min close to the Orlando area. 

I will have the certificate of title in about ten days in order to gain access to the property so here are the initial photos and a pick from the window...

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Chad U.
Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
10y

If this is your 1st courthouse auction, I would highly advise hiring an attorney beforehand to review the title and find someone to underwrite the insurance.  There's nothing worse when you go to resell the property and some defect gets discovered during the closing period.  

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  • Robert G.
    Residential Real Estate Agent · Miami, FL · Member since 2013 · 195 posts · 138 votes
    10y

    Congrats.  And good luck!  

    If you end up flipping it, be sure to take pictures and share your journey here.

    0Reply
  • Pavlos Kasselouris
    OP
    Project Engineer · Miami Beach, FL · Member since 2015 · 203 posts · 64 votes
    10y

    Thank you @Robert G.

    Sure, it might take just a bit longer than a usual flip, since I live in Miami, but at least my holding costs are minimal, but if this is successful then I can lay out a better strategy. 

    0Reply
  • Nick C.
    Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes
    10y

    Looks like a winner, congrats!

    0Reply
  • Seth Nadreau
    Real Estate Agent · Cape Coral, FL · Member since 2015 · 167 posts · 89 votes
    10y

    Congrats! This looks like a real winner!

    0Reply
  • Omer Husain
    Homeowner · Houston, TX · Member since 2015 · 89 posts · 19 votes
    10y

    Congrats man!  Keep us posted on the progress.  

    0Reply
  • Luis Puentes
    Lender · Miami, FL · Member since 2016 · 11 posts · 0 votes
    10y

    Very well done, Congratulations!!

    0Reply
  • Jose R.
    Miami, FL · Member since 2015 · 99 posts · 32 votes
    10y

    Congrats on your acquisition!

    0Reply
  • Josh Benitez
    Business Owner · West Palm Beach, FL · Member since 2015 · 40 posts · 1 vote
    10y
    Hi. Did you acquire at an actual auction or was it an online auction site like Hubzu? Also, were you able to perform any due diligence on the property?
    0Reply
  • Pavlos Kasselouris
    OP
    Project Engineer · Miami Beach, FL · Member since 2015 · 203 posts · 64 votes
    10y
    Originally posted by @Josh Benitez:

    Hi. Did you acquire at an actual auction or was it an online auction site like Hubzu? Also, were you able to perform any due diligence on the property?

     Yes it was an actual auction through the county clerk. That county does their auctions online.

    Due diligence was going to the property and getting as much info as possible as far as the condition of the property, doing research as far as ARV and having my title agent perform a title search to find liens encumbrances etc to her best of her knowledge. They might miss something but that's part of the risk...

    Now I don't know whether I need to bring a real estate attorney in the game, since the property is abandoned but I might do it when I get the Certificate of title in hand. This is still under concideration...

    0Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    10y

    God job! Your only other unknowns should be some back property taxes if you didn't check, and any HOA debts if in an HOA.

    0Reply
  • Josh Benitez
    Business Owner · West Palm Beach, FL · Member since 2015 · 40 posts · 1 vote
    10y

    @Pavlos Kasselouris how long was the time between finding the property listed for auction and the actual auction?

    0Reply
  • Pavlos Kasselouris
    OP
    Project Engineer · Miami Beach, FL · Member since 2015 · 203 posts · 64 votes
    10y
    Originally posted by @Josh Benitez:

    @Pavlos Kasselouris how long was the time between finding the property listed for auction and the actual auction?

     I search the properties that are listed on the calendar the week before, to give enough time to the title agent. If I start researching too early a lot of times some auctions get cancelled or they file bankruptcy. Other times the plaintiff's chang their max bid or hide it... so a week before is ok

    1Reply
  • Josh Benitez
    Business Owner · West Palm Beach, FL · Member since 2015 · 40 posts · 1 vote
    10y

    @Pavlos Kasselouris Thanks for the answers!

    0Reply
  • Account Closed
    Investor · Chagrin Falls, OH · Member since 2016 · 70 posts · 30 votes
    10y

    Thanks for sharing!! I have always wanted to get into that end of the market so i love hearing success stories:) Best to you!!

    0Reply
  • Chad U.
    Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
    10y

    If this is your 1st courthouse auction, I would highly advise hiring an attorney beforehand to review the title and find someone to underwrite the insurance.  There's nothing worse when you go to resell the property and some defect gets discovered during the closing period.  

    3Reply
  • Carol Hall
    Investor · Jacksonville, FL · Member since 2015 · 35 posts · 4 votes
    10y

    Congratulations! Thanks for sharing the details! Looking forward to seeing the "after rehab" photos.

    0Reply
  • Christopher Vargas
    Orlando, FL · Member since 2015 · 90 posts · 11 votes
    10y

    Congratulation @Pavlos Kasselouris!  Very nice acquisition. I understand you are in South Florida, so if you need a good guy to help with all the rehab, my father-in-law does amazing work at the lowest prices possible. He currently works with 4 other investors, myself included, but this month has been a little slow for them, so his work has slowed down as a result. Shoot me a message if you want.

    1Reply
  • Pavlos Kasselouris
    OP
    Project Engineer · Miami Beach, FL · Member since 2015 · 203 posts · 64 votes
    10y

    Thank you everybody, I'll definitely post pictures and updates on the whole process. 

    @Chad U. I'll consult with my re attorney, but what worse can happen if there is indeed a defect, that my title agent didn't initially find? The funds have been sent and it will have to be cleared either way, right?

    @Christopher Vargas We can talk in private. Good contractors are always in demand :)

    0Reply
  • Jean-francois Ndomb
    Real Estate Investor · Kalamazoo, MI · Member since 2015 · 120 posts · 37 votes
    10y

    @Pavlos Kasselouris Man, it never gets old to share excitement with people winning bids. I am also in the process or getting or ready to submit and i pray to GOD I get it. If not, onto the next until my turn is up. Good luck on the flip and keep us updated. Great curb Appeal from pic #1.

    1Reply
  • Chad U.
    Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
    10y

    @Pavlos Kasselouris

    Not all Title Agents understand foreclosures. Your attorney should review the foreclosure file to ensure that it was executed properly, ie. all parties were properly notified, chain of mortgage assignments were recorded if any, obtaining HOA estoppels, dealing with HOA attorneys, etc.

    You don't need to do this, but is a good insurance policy or ease of mind to know that there won't be any surprises at closing.  

    1Reply
  • Pavlos Kasselouris
    OP
    Project Engineer · Miami Beach, FL · Member since 2015 · 203 posts · 64 votes
    10y

    I just got the Certificate of Sale on hand, and now I'm waiting for the Certificate of Title!

    The good thing as I stated previously is that the property is abandoned so I dont need to vacate the property via writ of possession,  eviction or anything.

    I plan on going to the property the day after the filing of the certificate of title.

    I also got a quote for insurance during the period of all the construction activities. Do you think I should start the policy the 11th day or right away? 

    0Reply
  • Pavlos Kasselouris
    OP
    Project Engineer · Miami Beach, FL · Member since 2015 · 203 posts · 64 votes
    10y

    UPDATE

    Few days have passed so here are the updates on my first official flip.

    Last Thursday I got in the mail the Certificate of Title, and Friday morning I went to see from the inside the property...here is what I came across...

    Utilities are turned on today (because of Easter celebration), so we'll see other surprises...

    Demo has been completed except the scraping of the popcorn ceiling. I needed two 20yd dumpsters... The old cabinets were sold. Scope of Work is almost done. Bidding and Buyout is underway and so far I might be 2-3K over budget. Hopefully this will improve or the house will sell for more to achieve the appropriate profit...

    1Reply
  • Steven Anderson
    Investor · Spring, TX · Member since 2015 · 126 posts · 38 votes
    10y

    @Pavlos Kasselouris I take it the missing tub was a bit of a surprise. Not sure why they destroyed/took off with that!

    Good luck. 

    0Reply
  • Pavlos Kasselouris
    OP
    Project Engineer · Miami Beach, FL · Member since 2015 · 203 posts · 64 votes
    10y
    Originally posted by @Steven Anderson:

    @Pavlos Kasselouris I take it the missing tub was a bit of a surprise. Not sure why they destroyed/took off with that!

    Good luck. 

     No Steven, that was a destroyed walk in shower. Either way everything has been gutted. Next we8Ill have some progress photos.

    We have decided with my partner to add this property to our rental portfolio. We will cashout refi and go to the next one.

    0Reply
  • Pavlos Kasselouris
    OP
    Project Engineer · Miami Beach, FL · Member since 2015 · 203 posts · 64 votes
    10y

    I'm happy to report that project is finally OVER, tenant in place and after refi is finished I project over 18% CoC return! Now time to figure how I can do this and leverage OPM...

    Lessons learned:

    1. It is extremely difficult to manage effectively a rehab from 4 hours drive. From getting bids, to buying materials, from managing time to perform quality control...everything was a challenge...BUT it CAN be done!

    2. Order the kitchen cabinets first...

    3. Auctioned properties are given in a discount for a good reason...

    4. Not so happy with the performance of the contractor on scheduling. This is what you get when you hire a self-performing "Jack of all trades" that has only two helpers... but at least I knew from the start that since this was first one, it would be kind of slow.

    5. Rental market is crazy, I had 20 inquiries before even I was done with everything, just with a craigslist ad, and zillow listing!

    6. Put in my formula more profit, and more repair estimates.

    7. Have contractors bid with them removing their debris, unless I can bring in a good price a 60yd dumpster for the whole project! 

    7Reply
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