I am a new investor interested in purchasing at an auction. I will have all cash to buy the property and am planning to buy,rent, and hold the property so that it can appreciate. I plan to run comparables, drive by the property during the day and during the night, research the neighborhood, and have a title company provide my a title report to determine if there are any liens on property or 2nd mortgages. If the title report looks clean with only one mortgage, should I still be concerned about liens or mortgages not showing up on the title report? Although I would like to get a good deal at an auction, I don't want to do something foolish. I know there are also risks of squatters, tenants not leaving property, and costly repairs. I guess my question is, do you think that the potential savings offered by foreclosure auctions are worth the risks for someone like me who is a new investor (but one willing to put in the time and effort to thoroughly research)?
Hi Lia, I'm also a newb investor interested in foreclosures. I purchased a very good book, actually published by BPs. In it they call Fishing vs. Hunting, meaning its a number game. You don't look at one house but at many, to improve your chances. I truly suggest the book. Its, BIDDING TO BUY. By Aaron Amuchastegui and David Osborn. Found at BP book store or Amazon.
@Lia Locarnini Typically, you don’t care if there are multiple mortgages or liens on a property......as long as it is the First mtg that is foreclosing, the other junior liens get wiped out. There are exceptions to this...hoa debts in most states, some county/city/state liens. What you need to look for in some cases are “unrecorded liens”....code violations, utility bills, etc.
Each state has different laws, so you need to identify your area to get specific help.
Why would you want to buy your first investment property sight unseen if you are talking about courthouse foreclosure auctions? You are saying all the right things, but it's almost like a cut and paste. Like, do you know what all those things do and do you know what else to look for to reduce your potential liability or loss on things you might miss. You can't follow someone else's playbook if you don't have experience and the worst thing to do is to make your first investment a high-risk like a courthouse buy having never seen the place.
Thank you! I appreciate your book suggestion. I will check it out.
Thank you Wayne! This is helpful info. I appreciate your feedback.
Thanks for your reply. I posted my laundry list of items to get feedback from other experienced investors as to what else I should be looking out for. The post was part of my research in trying to figure out how to find a good deal on my first property and I wondered if I should even consider auctions as a newbie. I agree with you, that I should get more experience before buying at an auction. Maybe you or someone else has other suggestions on how to find really good deals.