I was going through the above mentioned websites looking at the properties coming up for sale. Has anyone found good deals on these sites before? If so what kind of LTV have you been able to get?
I'm also curious about whether there are good deals to be found at these sites. So far the houses that I have looked at that were listed on Hubzu have all been in pretty rough shape. Like - you might not be able to get a loan at all - kind of rough shape.
@Joshua Malik I am not so concerned about the condition as I can pay cash for them but the analysis that I see is that they sell high.
I was bidding on one particular property and I got beat out by a owner occupant bidder that was getting conventional financing. The property was missing a kitchen so someone (their Realtor) needs to tell the they cant bid on that property.
Trying to find out if I can get good deals on these sites and if so how would you recommend locating the properties that will work?
I have had some luck. Mostly the margins erode away as people bid them up. I will not buy from Auction.com again. I heard bad things, won a bid anyways, and then they happened to me. I had to call banks, county clerks, and the title company several times and it took months to record my deed. My lender was becoming concerned and it kind of hurt our relationship. Not a lot, but I work hard with banks to keep things smooth and easy going.
In the end, I had better luck with blind offers that include inspection contingencies. I also had good luck with short sales, day 1 on market. Last, I have good luck with probate MLS listings; I just have to negotiatie using an inspection report...since the owners have no clue about condition.
I, for one, haven't found a shortcut. It's just a matter of seeing the properties (as the pictures rarely tell the whole story) and doing the analyses.
Also beware because these sites will bid "on behalf of the seller" to try to trick you into thinking that you have competition and thus increasing your bid.
I see most of the properties on these auction sites have reserves which I understand. Has anyone seen a steady LTV that they consistently want? From my brief research I am seeing 80% is what some of these properties are being sold for.
@Clay Smith thanks for your input. Thats great that you have found a good niche. I have some good ones as well that work for my area, just want to see if I can add these auction sites to my acquisition methods.
@Don Montgomery I see your point. The 30yr owner occupant (OO) or DIY flipper will always win. They have lower overhead ($0 labor) and or cheaper financing (30yr fixed). With online auctions they have time to work up a full budget and plan weeks in advance. What you really need is something more distressed that the OO wont touch or the DIY fixer upper wont go for. You need a monopoly on your deal, or at least fewer bidders. Start networking more and seek out wholesalers advertising on CL. Those events pay off. It seems like I get a deal every 30 days now at one of my monthly meetings. It has taken a year to establish credibility but it is worth it.
@Clay Smith How do you identify probate listings on MLS? Do the listings include that term in the text of one of the fields in the listing?
Sounds like a good strategy for negotiating after its under contract.
I have bought properties from all of them. First of all, they all are fine if you play by their rules. You have to understand what they want you to do and get it done within 24 hours or you can lose your deal. Besides that there is nothing to worry about.
Auction.com is the least user friendly. Their reserves are ridiculous for the most part and they never reduce them. Hubzu and Homesearch at least want to sell their properties and their deals are much better. There is no formula. Their reserves are mostly set by the agents who work with them based on area and condition.
There are fewer deals out there now because newer buyers are throwing caution to the wind and are making the prices escalate to ridiculous prices. I have seen quite a few get relisted after a Buyer comes to his senses or his told he paid too much. He defaults and there it is again.
I hope that helps. Message me if you need more details on how to buy from them or see some of my previous posts.
Rich Baer, Esq.
@Rich Baer I think our markets maybe a little different. Currently we have an insanely hot market for which I am not complaining. But it does make it challenging to find good deals.
I have noticed that any of these auction prices get bid up high and these people close on them.
Appreciate you sharing your experiences that you are having with these sites.
@Brandon Johnson I identify them using key words.
- Passed Away
@Clay Smith it mentions those keywords on the auction sites? I looked on there and I see where you can search by bank owned, short sales, redemption's. I dont anything with the keywords that you mention. Can you attach a screen shot where you can search by those keywords on the auction sites?
sorry Don. I farm MLS for those. I do not bother looking for deals on auction sites because of the aforementioned reasons. I meant to direct my answer at Brandon.
Hi BP community!
I am new to the site and I am interested in learning about the RE business. I am an engineer by trade and I work and desk job M-F. I recently discovered that I don't enjoy doing what I am doing and I want to have more free time to do what I want/like to do. I am good with numbers, and I am willing to help in any capacity in order to learn more about RE. I am good at learning by doing and I am hoping to fine a great mentor who can trade knowledge and experience for my time and my skills.
I have dependable transportation I am available in the evenings and weekends as well.
Thank for reading.
I'm finishing up an Auction.com purchase. Hoping to net a 100% gain on the property. The deed recording took two months but it wasn't a huge deal for me bc there was no financing involved. At the end of the day the auction sites are like buying in any other avenue. Have your numbers, make sure they are correct and stick to them. If things get bid up, move on. Mine was cash only which seems to be the going rule in my area. Most of the properties allowing financing are now listed on the ten-x affiliate site.
@Don Montgomery in certain markets we have done very well with auction.com
in other markets waste of time.
What I like about this site is they have pretty high EM requirements.. and guys like us that actually have cash its to our advantage... it keeps the riff raff no money wholesalers out of the game. As you have to put your EM up and you have to have legit POF and corp docs and close in corp docs name.
so for the average guy wanting to flip or double escrow or whatever this can be pretty cumbersome.
based on that we have gotten some spectacular deals.. but again I shop in 12 markets and only 3 are worth the others are not worth it the prices are too hi and I can go to court house steps pony up my cashiers checks and do just as well much quicker without the Brain drain of navigating their system and the FLUNKY closings companies they use..
Thanks for weighing in everyone. I think you guys all shared something that I will start implementing.
These sites just have to be worth my time. I have a good marketing budget that kicks out decent return of properties every month.
I will just need someone to continually bid on these auction sites. I also may want to look at areas not to far from me.
I placed 2 offers on houses (both over $400k in value) and owner occupants bid me out. The thing is that neither had kitchens so I am sure they will come back on the market.
Just want to get 1-2 a month from this avenue so I will make it happen.
Thank you Don for the information about the website. I will do a search to see what I can find
Lets keep this thread going though. I will keep you up on how my bidding goes. I am placing 2 offers tomorrow.
I used to exclusively do escrows for Auction.com and Jay is right. So many investors thought they could assign or change the names, terms, etc and it doesn't happen. Auction.com will pull the plug on your deal so quick and keep your EMD on the way out the door. You have to be prepared to execute exactly what you agree to in the contract.
I also found a big deterrent/piss off point to be the buyer premium that they charge, which is basically the Auction service fee but it is passed on to the buyer. It is somewhere between 3-5% of the sales price (I can't remember off the top of my head) and most investors out there don't want to pay that much money for a mere service fee.
Thank you very much for the information.
I have bid on several and bought one property in the last year on auction.com. I ended up giving about 10% more than I wanted due to the bid up. Ultimately I am very happy with the property but will focus on buying differently for now. Too many OO's or small investors to compete with right now, not to mention that dang buyers premium.
I have had most of my success as @Clay Smith points out. Blind offers with inspection contingencies, day 1 listings, and a short.
Simply knocking on doors in my farming neighborhood has helped as well. People will give up all kinds of information on the neighbor and makes it easier to find the right person to negotiate with. Don't be afraid to knock some doors and ask questions and for contact information!