This was the first auction I had attended that was not at the steps. I do not know what type of turnout to expect but was shocked to see the small amount of cars. Primary advertising was signage in front of house along with a 5 block radius on corners off of a main road. This area has been pretty active for investors and I would “guess” that about 20% are rentals. The opening bid was 1K and maybe the rest of the group was looking to steal it, hence, there were only a few active bidders. Most of the as-is homes in the area usually sell for mid to high 40’s, needing a lot more work, and ARV’s are in the mid to high 70’s. I placed my ARV at 70K because thats just the way I like to run my numbers. Then, an extra 5 or 8K is a bonus!! My estimate of repairs is inflated because I added replacing the CHA unit along with other minor stuff. There was no power, so no way to check it. Carpet, paint and kitchen cabinets is the last of large dollar amount items that need to be done. I assumed that it would go between 43-50K and I was planning on just being a spectator. When bidding started slowing down around high 20’s, I perked up. I got in around 32K at first(wife was about to kill me because I was too relaxed!), I believe the other 2 bidders was an owner occupant and investor.
The property is located on a corner with a rear fenced yard and additional shed. The only other things I would be worried about and was not able to verify if working properly is the water supply and sewer. I have done enough of both to not make it a problem for me, just a hurdle. Hope I supplied some answers for you.
I was looking forward to meeting you in Atlanta and appreciate what you contribute to this forum. Maybe I will see you next year!!
and I will share with you about an auction for a single family home I attended this morning.
Here is how this “terrible” deal penciled down…
winning bid = 36K
repairs = 8K
ARV = 70K
3 bedroom / 1 bath that will rent for 675-700 /month
I happened to be the winning bidder… DEAL or NO DEAL??
As you can see, I am joking around…
For you newbies… these deals are around you just need to be patient. These are the percentages you need to buy at with a changing market, it creates so many options. I already have 2 homes on the same street and 1 the next neighborhood over. I KNOW what they can rent for so I believe my knowledge of the rents helped me win this auction.
Happy Investing…
Scott
BTW…This was a heavily advertised auction… only 16 people showed up and out of that, 4 were bidding… Maybe they were all, buy low, sell low investors and not landlords… Can you spell C A S H F L O W !!!
I’m still seeing some inflexible sellers here. Not many are willing to take low ball offers YET. I’m on the West coast and the market is at a stand still at the moment.
Looks like you have yourself a nice one…and yes newbies should learn that deals can be found in ANY market, hot or cool.
Please give a little background and insight into what the circumstances surrounding the auction were.
How was the auction advertised…? Was it an absolute or reserve bid auction…?
Was the turnout of 16 ppl for an auction in your area about average, low or what…?
Based on your prior experience at auctions, was the amount bid low compared to others properties sold in your area at auction…?
What would you attribute the above to…? What area of FL is the property located…? What kind of limiting factors did the property posses…? In other words, was there any particular reason why other investors or end users stayed away from the property… (e.g. limited egress, terrible view or surroundings, rezoning in close proximity, heavy rental area, etc.).
How many properties in your area per month, would use similar auction methods in an attempt to sell their property…?
Sounds like you did well on this one; Congrats. Just trying to understand the whys and wherefores of what happened there, as that seems unusual for what I know about FL… even in the recent buyers mkt…
Good job Scott. I think those numbers even work for a flip. I still pursue auctions here even though the bidding usually gets a little stupid. You never know when you’ll see something or know something that everyone else missed.