Need Help Buying Homes at Auction

2 Replies

My partner and I are looking to get started in investing in Fix N Flips. I've been looking into buying homes at Auction. I was wondering if any of you with experience in this can tell me if what I learned so far is correct? 1. Get a Title search done 2. Bid on the property that is being foreclosed on by 1st lien holder because it wipes clean all the loans taken after that one. Unless 1st loan is very small and I bid on second lien holder foreclosure because numbers still look profitable. 3. If owner occupied either work a deal with tenant to move them put or evict them? I'm not sure about this particular situation. I've also read that they will move out once foreclosure is finished. ??? 4. What about back taxes? They come up on title search as a lien? Unless property is being sold as free and clear? I appreciate any feedback on this. Thank you

Hi Mike,

I highly encourage you to find your local real estate investment group. There will be someone there who has done what you want to do. Personally, I haven't bought from an auction, although I have attended a few, because I want more time to do my due diligence. It is worth it to me to pay a little more to a wholesaler and go through an attorney to close and make sure the title is clear, allow me a walk through, etc. Buying at auction is jumping in the deep end. You can certainly learn to swim that way, but it might be more painful than it needs to be.

Good luck!

@Mike Bitette The house I purchased from had a lien on it from the City, for not cutting the grass. You can get out of it with the City by showing improvements made to the house in and above the value of the lien. After all, improvements improve the tax base too. 

Get the title search done, see if there are any other costs on the property. Most auction sites are bank owned properties, so they will have paid the property taxes, there should not be back taxes, unless the property is part of an IRS tax issue. You will get a Special Warranty Deed, which holds the bank, the auction site and all those affiliates harmless in case your deal goes south after you take possession. The Auction sites are clearing houses for the banks as easier ways for them to sell lots of properties than to have REO programs for each bank. Best of luck to you.