Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Starting Out
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated 3 months ago on . Most recent reply

User Stats

6
Posts
1
Votes
Shawn Nofziger
1
Votes |
6
Posts

Foreclosure auctions? Good or bad?

Shawn Nofziger
Posted

I have quite a few options in my areas to bid on foreclosed properties.  Can anyone share their experience?  Was it lucrative?  What should I keep an eye out for?

Most Popular Reply

User Stats

1,759
Posts
1,508
Votes
Doug Smith
  • Lender
  • Tampa, FL
1,508
Votes |
1,759
Posts
Doug Smith
  • Lender
  • Tampa, FL
Replied

Hi Shawn, When I left banking during the last major crash and started this company, we primarily were a commercial bridge lender, but we also were a real estate investor. The forelcosure auctions in my home State of Florida are all online. They are also filled with newbies that just paid $10K for a course and the Days Inn from someone that doesn't, themselves, really know real estate...otherwise they wouldn't be teaching it, they would be doing it. When we did it, we did score some great deals, but what we found was that we were visiting so many properties to understand our "strike price" (the maximimum we would pay for the property when taking into account rehab costs, hold times, interest on any debt, closing costs, real estate commissions, a contingency reserve for "unexpecteds", etc) that the math started to not make as much sense. We found that we were often outbid by novice investors or that the bank set a reserve price so high we couldn't make the numbers work. On most deals we bid on, the bidding would start way, way above our strike price. "How in God's name do they plan on making a profit" would come out of my mouth all the time. Personally, we saw some great deals, but there were others with different modeling that we have that had us winning very, very few bids. We found ourselves wasting an obscene amount of time doing our due diligence where we doubt that the vast majority of bidders actually understood the costs involved in the rehabs. I know that's not what you asked, but that's been my experience. Good luck with your investing business. If I can answer any questions please let me know. 

Loading replies...