South Dakota Sheriff's Auction

[Gene Boykin]

I'm just getting started in the fix and flip business.  We are initially looking at pre foreclosures and sheriff's auctions.  In some instances at the Sioux Falls sheriff's auction the bank will make its initial bid significantly lower than the listed foreclosure amount.  The banks always make the first bids at these auctions, it's protocol.  I'm wondering why the bank bids lower on some foreclosure amounts and not others?  Can anyone help with this question?

[James Kats]

I bought one at the Sioux Falls auction back in January that was listed in the $75,000 range but the initial bid was $44,000 ish. My assumption is that they just wanted to get rid of it and be done with it. It does have a collapsing foundation and been vacant for several years so I can see why they  chose to fire sale it. You don’t know unless you are actually there at the auction though if they are going to do less than the foreclosure amount though. I hadn’t even considered buying the place before I showed up there and they said the opening bid.