county auctions foreclosures: worth the risk?????

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county auctions foreclosures: worth the risk?????

Tierra Petersen
Rochester, WA · Member since 2017 · 33 posts · 5 votes

I'm in Rochester, Wa, 20 Minutes south of Olympia

 I'm tinkering with the idea of buying a foreclosure that's next door. I just wanted to get people's input. They are $15,000 behind on their taxes. It makes me sad to buy someone's property, potentially, because they were unable to pay their taxes. I really don't know how I feel about making a profit off of other people losses. I'd like to talk to the neighbors and ask them what's up. I think that would be a real awkward conversation and they might get upset.

I don't have any money, but I do have some property and a mobile home. It seems like if I bid at the auction, I could seriously mess up and get stuck with a money pit that I can't get rid of or I could potentially make a lot of money or have another rental.

It seems like there's a lot of risk involved buying a property without seeing the inside. So I joined this site to see if anyone had any useful advice on this subject. 

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  • Tyler Blackwell
    Rental Property Investor · Olympia, WA · Member since 2010 · 127 posts · 76 votes
    8y

    HI @Tierra Petersen, welcome to BP!
    No doubt it would be a little weird to be the one that snatches up the neighbor's property if they go under, but if you don't, who will? As investors we're supposed to put on our "impartial hat" and make attempts to act without much emotion toward properties, but it wouldn't be easy for me to do the same for a neighbor's property, especially if I knew them on some level. That isn't to say you shouldn't buy it!!. Actually, as sad/awkward as it may be, you kind of have an informational advantage in this situation that might be helpful. Then again, how do you bid on a property if you have no money?
    Is this a tax-foreclosure sale? or do you just know they're behind on their taxes? How is it being sold? When?
    I have been looking in the Rochester area recently, so if you'd like to chat about the deal or how to go about it, PM me and we can toss ideas around. 

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  • Andrew Hodgson
    Real Estate Broker · Olympia, WA · Member since 2016 · 79 posts · 55 votes
    8y

    Welcome @Tierra Petersen!

    I'm just up the road here in Tumwater. Something to think about with the ethical question you described... You aren't taking advantage of anyone, you are actually helping them out! There are options for homeowners to get back in the good graces of lenders well before the point of the foreclosure auction. So, if they are now at the point where they have to sell their home, for whatever reason, then one of the best ways to help them is to buy the house. Then they can get the lender off their backs and move on with life. 

    As far as talking to the homeowners, I'd would highly recommend getting to know as much about their situation as possible. You need to know what's going on so you can make a wise financial decision. And I think you should be upfront and honest about why you are asking.  

    You should come to the Olympia REI group meet ups! You will get to meet local investors with plenty of opportunity to network and ask questions. The next one will be in January. @Naomi Pinger is the contact for that :)

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  • Tierra Petersen
    OP
    Rochester, WA · Member since 2017 · 33 posts · 5 votes
    8y

    Thank you both for replying. It helps a lot. I'm totally going to join this group you speak of, because I have a lot of questions regarding restate and I don't have anyone to ask. 

    I was thinking about trying to bid on the the property at an auction, if I get qualified for a hard money loan, then switching to a normal mortgage after. I'm not sure if I'd qualify for that or not. I'm just trying to learn as much as I can for now. 

    Anyway, thanks for you advice!

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  • Tierra Petersen
    OP
    Rochester, WA · Member since 2017 · 33 posts · 5 votes
    8y

    Hey

    Tyler Blackwell, I just realized I never actually answered your questions, about buying property with no money. I've decided that that wasn't a good idea. My mother told me I could subdivide some of her property here in Rochester to put into a business. I'm not sure if that's entirely doable or not. Do you know anything about the subdivision of land? How costly is it or how long does it take?

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