Help me come up with $200k to buy a house at auction...

3 Replies

Let me preface this by saying this is an incredible long shot.


My wife and I have been attempting to buy a house for about 8 months now. I'm very picky and looking for a good deal. Unfortunately, in this market, it's not really a recipe for success. A home just popped up in a foreclosure auction which checks all of our boxes. Pending a title search, it could be the perfect opportunity to build some sweat equity in a great neighborhood for a personal residence.

Assuming the title search checks out, the major hurdle is coming up with the cash necessary to purchase which would be due in 24 hours after auction close.

Weapons in my arsenal:

~$50k cash in a Capital One 360 Account
~$100k in a taxable vanguard account which currently has a $5k unrealized loss due to this recent dip in the markets.
~$100k in various IRA/401k and their Roth variants which I would NOT want to utilize for this transaction

Pending title issues, we would be interested in paying up to $200k for this house. Estimated value would be in the ~230-260k range but it really depends on the condition...which is a bit of an unknown at this time. Fixed up and in good condition I would say it's a $270-300k house.

Hard money lenders don't seem to want to deal with the hassle of a foreclosure auction and the associated lack of inspection/amount due immediately. I'm still working on the idea that we have a significant amount of collateral and would compensate them for doing their due diligence. Family members could potentially be an option for small amounts, but not the whole deal. Ideally we would find a lender, pay the outrageous points/interest rate for as short as possible until we could refinance with a conventional loan. If we can't find a lender, should I sell my stocks at a loss in hopes of picking up this property for $150k or less?

Any other ideas or suggestions?