Buying On Auction Sites

Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes

15y

Hi Sherry and welcome to BiggerPockets. You might want to post in the New Member Intros forum to introduce yourself.

Your post is very broad. That type of post doesn't usually generate as much response as specific questions. Books have been written for "any advice possible" for flipping houses. "Any advice possible" could cover everything from how to get bids from contractors to what color to paint to how to write the listing when you finally list the property for sale.

Do you have specific questions? Or, some area that's particularly troubling?

If you've already bought the property, why do you need a HML or partner? Rehab money?

When you say "my hopes are they will both be basic quick flips without alot required to complete them" what do you mean? That the properties don't require much work and they can be quickly fixed and you hope they will sell quickly? Or, that you've not actually seen the properties and you hope they don't need much work?

1 Reply

Sherry Lewis

OP

Rehabber · Fort Walton Beach, FL · Member since 2011 · 240 posts · 48 votes

15y

Dear Jon,

First I wanted to say thank you for responding to my post. I had not realized that I posted in the incorrect area.

I purchased the 2 properties from auction without visiting the properties. I saw photos and I did what I believe was full due diligence (i.e. assessor, tax collector, corelogic, google maps, trulia, realtor.com, altos, rentometer etc. to get a feel for the area. I had the funds to purchase the properties fully knowing that I would need to either get a partner on the deal or go to a hard money lender for the rehab portion of the project. I believe both houses can be rehabbed for 40k or less (I took what I believed it would cost and doubled it to give myself a cushion). I guess I was trying to get some advise on how best to proceed. Whether there were reliable hard money lenders that folks we familiar with in the Ohio area or anyone interested in some sort of partnership on this deal. These are my first solo transactions and I am a bit nervous. There are so many options out there with hm lenders and I am not certain how to approach someone in a partnership. What I really need is a mentor I guess. I don't require alot of hand holding, but some to get me on the school bus that first time helps LOL.... I hope to hear back from you!

1 Reply

Jason Mathews

Real Estate Coach · ocean city, NJ · Member since 2009 · 28 posts · 3 votes

15y

Wow Sherry! Talk about jumping in with both feet. I appreciate that you did all that due diligence, but if it were me, the very first thing I would do (assuming you don't live in the area where these homes are located) is contact a Local Realtor and ask him/her to pull some good and as recent comps as possible for you. Ask thIs person to start with 1/4 mile and 3 months for comps and spread out from there. Many of the sites you mentioned are nice guides, but personally, I find they are off the mark sometimes by as much as 20%, especially Trulia and different municipalities assess at different percentages of actual value and the last Tax assessment may have been several years ago. Again, if it were me, I would find a local realtor preferably with a GRE designation behind his name and offer him/her the sale listings in exchange for what ever assistance they can give you. These local Realtors will have contact with Local contractors to give you work estimates and also local lenders who are actively seeking new business. In Case your wondering, I am not a realtor, but have been investing in RE for 30 odd years and know when and where to ask for help. It is a rare situation that would cause me to invest out of my local tri state area (I know the local market well) but on those occasions when I do, I go strait to the nearest GRE with a good reputation. In addition to asking for recent comps, I would also ask for average days on market. Additionally, I would ask them to do some rental comps. I know, you want to flip, but a good backup plan can save a lot of stress and there are many investors around that like nice clean properties that already have tenants. Get a good rapport going with the local expert and in exchange for the promise of a future listing, they can put you on their "not afraid to jump in with both feet" list and refer you to other great buys. I have such a rapport with several realtors from Charlotte NC to Dallas Tx, who e-mail me regularly with great buys. We are at the point where they just write "buy this", I do, and they handle everything else from repairs to Carpet selection and then they market and sell or rent.
As for financing, I would avoid Hard Money loans if at all possible. Look for local lenders, I find Local Credit Unions are often a great source of funds and it will help if you tell lenders that you plan to rehab and rent. many lenders today don't like the word "Flip". If you have equity in your personal residence, you might consider a Heloc. You might want to let people you know, know that you are investing in RE. Don't ask them for money though unless you know them really well. I just tell people about the wonderful deal I found, show them the pretty Market Analysis the local realtor did for me and once in a while they say, Oh, gee how can I get involved :). Worse case scenario, there are several site online that offer Hard Money loans as a last resort.

Hope that helps.

1 Reply

Jon Holdman

Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes

15y

First thing I would do at this point is to get on a plane. ASAP.

You need to get on the phone and start looking for someone to help you rehab these houses. You need to develop a full team in two remote locations. I've done several rehabs and would not EVEN attempt to do one remotely unless I had people lined up that I knew I could trust intimately.

In this situation, I would absolutely not mortgage my residence to fund this deal unless I was certainly I could pay the loan even if this deal goes belly up.

Now that you're in this far, the number one thing to do is to get to Cleveland and Toledo and see what the real situation is on the ground and to meet some people.

Buying On Auction Sites

Most Popular Reply

27 Replies