RE Fortunemakers

Foreclosure Auctions are like car accidents, nobody wants to be the victim but there are many interested in watching it happen.  For some people auctions are a waste of time and for others the only way they know how to buy property.  Put these 5 tips to work for you (especially #5) and you will have low risk and huge profits.

1.  Find out who is Foreclosing:  First determine if it is the first mortgage or the second mortgage holder that is foreclosing.  If it is the first mortgage, you will be buying subject to the state, federal and municipal liens such as taxes, water and sewer.  If the second lien holder is foreclosing, then you’ll be subject to the first mortgage payoff amount and the state, federal and municipal liens.

2.  Conduct a Title Search:  To uncover any title defects that may adversely affect the value or marketability of the property.  Normally you do this after you have a property under contract but at an auction you have no way to back out without forfeiting your deposit.  In most cases a present owner search is acceptable.

3.  Be a Spectator:  Attend at least two auctions as a spectator  prior to becoming a registered bidder at an auction.  You should visit two other auctions that you don’t intend on bidding at to witness the process.

4.  Contact the Auctioneer: Call the auctioneer the morning of the auction. This will save you time as many auctions are canceled or postponed.

5.  Network: Networking with investors at the auction is one of the best techniques to find motivated buyers.  You can find buyers in ways such as calling the we buy houses signs or ads, but the investor that buys at the auction are in most cases focused on buying at the auction and they do that simply because it’s the lowest hanging fruit.  It is very easy to identify an opportunity as long as you can read the newspaper and follow a map.

It amazes me that no other investors do this. How do I know this?  Because, I am the only one at an auction going from car to car to introduce myself and exchange business cards and find out what type of properties they like to buy.  Most investors keep to themselves at the auction because they consider the other people competition.   I don’t consider them competition, I consider them cash buyers and they may want to buy a property that I am not interested in or they may pay more for the property.  Either way you will make more money.

The auction is the place to be even if you are not bidding on the property.  I challenge you to build your buyers list with auction goers and see how your business dramatically takes off this year.