Buying current STR property through Auction.com Foreclosure

Hello Josh, and congratulations on the find!

I bought through auction.com, and it was a smooth process. However, you need to read the fine print and try to walk to the property if possible. You're not legally allowed to knock on the door in the state of Arkansas, where I purchased my property through Auction.com. Since I was remote, I had my dad first verify that it was vacant. Verifying vacancy should be top priority because you don't want to buy a property cash and then evict someone, which can be time-consuming unless you have the time and want to push forward with the eviction process.

After verifying the vacancy, we wanted to assess the amount of work needed, so we peeked in the windows to gauge how much we should pay for the property in order for the numbers to make sense. It sounds like this property is an operating STR, so it doesn't sound like much work needs to be done, so you're good there.

Next, the bidding process. Once you know how much you need to pay, they will usually have either a courthouse bid or a remote online bid. My bid was online and was 2-3 days. On the last day, you can put in last-minute bids online like you're at the auction live. You can wait until the last 10 seconds on your screen and place a last-minute bid to win. This is what I did. Now, if you're the winner, you will need to wire the earnest money immediately. I believe they have 48 hours or so to cancel your contract, so having those funds is of utmost importance. It can change from situation to situation, so read the fine print. You will also need to show proof of funds, as all auctions require payment in cash. Once you show proof of funds, you're essentially waiting for them to set a closing date, and the property is yours; however, you need to be aware of your state's laws regarding how long the original owner has to reclaim the property. I believe in Texas, it can be up to 2 years, so it's up to you if you want to take that risk. Still, if the original owner does come back wanting his property, they usually have to pay you a 10% markup, but this varies by area, so be very familiar with these rules. 

It's a straightforward process, and most people are scared to do it, but if you do your due diligence, you can get some killer deals from auction.com. I bought an STR property from there for 35K, put 35K into it. It was appraised at $ 95,000, and we made $ 10,000 off of it in the first 60 days of using Airbnb. Talk about a free house. The auction.com method is highly overlooked, especially when setting up STRs. It's a gold mine.

Good luck to you.