Went to a HUD live auction last night. I hadn't bought any HUDs since the early 90s because I thought they were being bid up by inexperienced owner occupants and investors. And at the time I was in Houston so there was plenty of other inventory.
Anyway of the 24 that had originally been on line, 7 had sold pre-auction. I was very interested in one, and mildly interested in 2 of them. After a good look at one of them the mildly became TOTALLY NON-INTERESTED.
Since I got the one that I was very interested in I just watched the rest to see where things went. I may have gone for the other mildly as it ended up going for about 55% of FMV as near as I could tell, but I usually don't do mobile homes.
Anyway, on to the other place. It was in ROUGH shape, although maybe not any rougher than the one I bought. But, it was in a neighborhood of rough places with a smattering of nice houses. The problem was that there were 4 or 5 other MLS listings within a few blocks that look like they'll be on the auction block next time around. After a quick look the agent and I shrugged and headed to dinner.
Anyway a couple of investors got excited about it and ended up bidding it up to $3500 OVER the MLS price. The agent figured that a good, cash offer could have bought it off the MLS, prior to auction for about $4K less than the MLS price. IOW they paid about $7.5K (about 25%) too much for this place. When investors pay too much, it makes it hard for all of us to get good deals!
Caution to all of you, caution to me too. Don't get caught up in the excitement of the moment and don't get GOTTADOADEALITIS. I've been guilty of the latter a couple of times. It is an expensive lesson to learn.
I am the worlds greatest authority on my opinion
Thanks Cash for looking out!
Great story all cash. I love the term "GOTTADOADEALITIS". It is so true that a motivated buyer will justify all types of things just to buy the deal. What they don't know at the time is that they will be cursing that decision in the near future.
I am always reminding myself that I have to be a SHOPPER and not a BUYER. Shoppers grab good deals while buyers grab the first thing in front of them.
Mr. All Cash,
You make good sense there.
The deal of a century comes along every few minutes :D
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!