anyone have experience buying foreclosed properties at auction?
Hello everyone. I am a contractor in philly looking to expand my horizons. I recently found my first investors and would like to know if anyone here has experience buying foreclosed properties here in Philly.
@Nikolai Skhirtladze people have a lot of experience.
You need your own cash to close at the Philly sheriff sale.
Are you a contractor in the city? Can you send me examples of your work?
Thanks.
David,
Yes I'll email you some pictures of work that I've done. Mostly it's renovations from start to finish. What are you looking for?
I am looking for any advice on foreclosures because most of the deals for sale in the pockets I like seem to be in foreclosure. Can you tell me more about the pros and cons of buying at auction?
are you talking about sheriff sale/auctions or sites like auction.com? I have been unwilling to buy online auctions because from what I can tell, you aren't getting any title guarantee. for every property I have seen on auction.com you are getting a special warranty deed but that doesn't protect you from anything that happened before the lender took possession, which would be EVERYTHING that can bite you. I am curious what others' experience is or what auction sites. So many properties are going to auction sites now. I am just suspicious that the ones that go to auction are the risky ones. Some don't even let you in the property.
I've been through the auction process with various sellers/banks/etc.. Generally speaking its' not more difficult than working through the typical transaction process (where the listing agent may or may not be someone great to work with). Sometimes you can go through these properties and evaluate them. Sometimes you can't, or they are sometimes still occupied. I haven't found anyone that wants to deal with that side of it. I'd love to hear other's experiences though on purchasing properties at auction with people still living there. I think I can stomach a lot but don't think I can do that one.
I have experience with the sheriff sale here in New Castle county DE. I've tried to be the buyer and it's basically a full time job. I went through the process a few times: narrow down the list, go visit the properties, peak in the windows (or walk in the door if possible), calculate the numbers, pay for a lien search, etc...
I narrowed it down usually to about 10 properties. The lien searches cost me approx $75 per property. I knew the max price I would pay for each property. I knew I did everything accurately when each of these properties ended up selling for 5-10k more than my max bid.
The banks buy back most of the properties where the amount owed on the property is higher than any investor is willing to pay (probably 60% of the properties are bank buyback). Another chunk of the properties the city is the plaintiff because the owner hasn't paid property taxes. If the liens plus the back taxes on these properties are less than what an investor is willing to pay then an investor will bid on it, otherwise the city will buy it back.
The remainder of the properties are bought by a handful of investors. So, it's competitive and difficult to buy one but not impossible. I've chosen to avoid the whole thing and just keep finding properties off market which I've had success doing thus far.
Originally posted by @Stephen Kappre:I've been through the auction process with various sellers/banks/etc.. Generally speaking its' not more difficult than working through the typical transaction process (where the listing agent may or may not be someone great to work with). Sometimes you can go through these properties and evaluate them. Sometimes you can't, or they are sometimes still occupied. I haven't found anyone that wants to deal with that side of it. I'd love to hear other's experiences though on purchasing properties at auction with people still living there. I think I can stomach a lot but don't think I can do that one.
Maybe @Harshil Kakadia can tell us about his auction purchase where the property was occupied ...
Originally posted by @Nikolai Skhirtladze:
Hello everyone. I am a contractor in philly looking to expand my horizons. I recently found my first investors and would like to know if anyone here has experience buying foreclosed properties here in Philly.
Stick contracting and scaling your business. Know what you know. imo
I have experience selling distressed properties in Philadelphia and am very familiar with the process. Would love to connect.