Need advise: No bids on homesearch.com, should we place a bid?

Question

Hello everyone,

We looked at a property that needs some repairs (new water heater, washer/dryer, dishwasher, paint, flooring, kitchen counter-tops, cabinets). We didn't hire an inspector, it was just a visual inspection around the property with our realtor. The property is on homesearch.com for auction since 5/30, auction ends tomorrow. CMA from my realtor estimates the value to be at $330-$340K, monthly rent at $1400 per month. Starting bid is $175K, I don't see any bids on it yet - only a day for the auction to end. We want to fix it and hold it as a rental. This will be our first buy and hold. Should we concerned about placing a bid since there are no bids on it yet?

Few negatives for the property

1. There is a Power Station right across the road.

2. The house is built in 1950s. Not sure if there are any settling, or foundation issues - we didn't see any cracks on the walls or flooring.

3. Garage was converted to an additional living area. Not sure if this was permitted.

Thanks,

Charan

Michelle Zarlengo · Answer

We watched an auction on homesearch.com and put in an offer. In our experience they had a high unknown reserve. We also noticed ALL of the bids came in 20-30 minutes prior to the auction ending. The first auction ended without the reserve being met. The bank can decide to use homesearch again or not. In this case they did a second auction and the house went over the original asking price by a lot. We figured a 150k ARV with 40-50k in repairs. It sold for 181k. It was crazy and it seemed the first auction was just to see how much interest there was. Hope your experience is better than ours. Good luck.

Charan K. · Answer

Thanks @Justin S. I will look for action in the last 20 min.

Thanks @Tammy Vitale. Yes, there are power-lines overhead, so that is still a problem. I will look more into how much it costs to get lead paint removed.

Tammy Vitale · Answer

if you're renting you're going to have to deal with the lead paint issue (build before 78);  some people with children won't live around power stations if there are lines overhead - or is it just a station?  Garage conversions usually aren't a problem but if you're concerned, you should check with your local planning and zoning office.  They can tell you.

Justin S. · Answer

@Charan K.

It has been my experience that most of the bidding takes place in the last 20 minutes.  Good luck!