Buying Property in Auction - Other Risks?

[Kevin Nichter]

I am looking to purchase an investment property through the public auction process here in Louisville, KY. The property I'll be targeting is in an excellent location but I have good reason to believe it will require a major update inside (although nothing structural or roof-related). I have surveyed the property from the outside and I'm extremely familiar with the location and trends in that area. Just a few questions: 

1.) Other than the risks of purchasing the property unseen on the inside, is there any other major risk to be aware of? As I understand here in Louisville, properties are sold "free and clear of all liens" which I understand to mean there won't be any other undisclosed liens that should have been factored into the bid price. 

2.) Kentucky has a "120 day Right of Redemption" rule that would give the current owner a path to retain the property should the property sell for less than 2/3rds of the appraised value. However, the county has not listed an appraised value on the property. Am I right to believe that should my bid be the highest that this risk no longer exists? I don't want to wait months to start a rehab project. 

Thanks in advance!

-Kevin

[Chris Seveney]

@Kevin Nichter

You should always run title on a property at auction to understand the liens and if any are superior to you when purchasing

Also have an attorney review redemption laws as you mentioned you do not want to renovate then have them redeem

The other consideration is just because you foreclose you still have to evict.