Posted by Denise,TX on November 16, 1998 at 21:39:30:
Thank all of you for your responses. I am not a member of AIREO, but would like to know more about it. This builder hosting the auction had the house for sell for one year, but no one purchased, so he might be a slight bit “hungry” to sell, but this is a “large” home and even if he really was in trouble, again, it would be hard in this short amount of time to find an investor. Any other suggestions, I am very open to them. Thank you.
P.S.: I would have wanted to keep this one for myself.
Posted by Denise,TX on November 16, 1998 at 24:29:41:
A Builder in my area will be hosting an auction Tuesday, this week, to sell a “large” home. I just found out about this auction today. He is only holding an auction because he feels it is what other builders are now doing. He is not in “trouble” with any payments. I have read Hank Harenberg’s book & tape “Working With Developers As a Referral Source.” Has anyone worked this kind of deal before? And, how do you suggest I approach the builder before it reaches the auction day? I will find out more regarding the starting bid, or what the builder wants for the home today. Also, how can I find an investor in my area quickly who might be interested in helping with this? I am in the Dallas, TX metroplex.
Denise - you said the “key” words - the builder is not in trouble…
Your goal should be to find motivated sellers, ones in trouble someway - you need to find sellers that MUST sell - the house is secondary.
Just because it’s an auction doesn’t mean it’s a super deal - it’s a popular way to sell high priced houses in our area – but they go for retail or better. And like Irwin said, if the builder doesn’t get his price, he simply won’t sell.
But, next time you do find a good deal and need someone to flip to - call me at 972-496-6032.
Are you a member of AIREO? It’s the investor club in Dallas - give me a call and I’ll give you more details about it.
Personally, I stay away from these kinds of things. Think about it. The builder isn’t in trouble, so he doesn’t have to sell. The auction will be with a reserve price which will guarantee the builder a decent profit, so the starting price will be above wholesale. If it doesn’t bring the price he wants, it won’t be sold. Also, it won’t be a cash sale, so investors with cash lose their advantage. He will probably take 5-10% down, or even less as earnest money, on the day of sale and he’ll give the successful bidder 30 days to close. This lets everyone into the game. If the home is new and in a good area, it gets bid up close to retail,(I’ve actually seen retail +) and your time spent has been wasted. That’s just my experience.