Re: Buying at Auction or Short sale or REOs? - Posted by Chris in FL
Posted by Chris in FL on September 07, 2011 at 06:23:15:
I agree, there can be good deals in auctions, as well as pre-foreclosure, bandit signs, etc. Many avenues can turn up an occassional good deal. However, I am currently buying a deal every month or two… I want the most, best deals for the least time/labor investment. I only ever attended two owner ordered auctions, an admittedly small sample size, but with over 5 bidders at each auction, and at least 2 serious bidders besides myself at each, both left my price range quickly. If I have to go to more than 5-10 auctions to buy a good deal, and my guess is that would be true, then the time investment is too much. MLS, buying REOs and short sales, is faster and easier for me. I see location, house, pictures, price, size, and other details on MLS houses at my computer every morning without ever leaving the house… I know before I go what my odds are of getting a deal - I only go to look at houses that are priced right to begin with, and I end up buying about 1 in 5 that I go to look at. I have talked to auctioneers several times, and they have one job - get as close to full price as possible… From my small sample of going to auctions, and talking to auctioneers, my estimate is that it is not worth my time. Not only that, but I buy in one location - North Lakeland. The number of auctions that take place in my location - very limited. Not nearly enough to get the quantity of deals I want. The number of REOs and short sales on MLS - I hesitate to even guess, but it is a pretty large number right now! Just say, enough so that I don’t waste my time looking at borderline deals… I only go to look if it appears to be a slam dunk deal! My method won’t be perfect for everyone, and all methods produce some great deals, but experience tells that, in order to buy a high quantity of great deals in this market, now, in my area, it would be very difficult to beat what I am doing. I study constantly. I try other methods, continually, and the second a better way turns up, I try to see if it is repeatable. So far, nothing compares to what I am doing. I know guys that do a ton of advertising, and get their deals that way, but when weighing the time and expense of that method, compared to the deals they land, it still doesn’t make as much sense to me as what I am doing. I have tried auctions, advertising, bandit signs, wholesalers, etc., but all of those combined might land me 1 deal compared to 10 that I am getting off MLS in this market. REOs and short sales are the game here, now. Back before the bubble burst, REOs were way too high, and banks weren’t motivated enough on short sales. This method didn’t work then. Today, IMHO, nothing else compares. Not even close. But you can bet, the second I find something that does, I will be the first to admit it (and move on to greener pastures)!!!
Chris in FL
P.S. - Charles, in your experience, how many auctions occur in one area like North Lakeland (FL), and how many auctions does it take to produce one great deal in the under $30K price range???