Great property up for auction on Auction.com, but no one is bidding??

[Marlene Michael]

I found a property on auction.com that looks like a steal of a deal. Two problems: 1) There is no access before bidding/purchase, 2)It is still occupied, so I can't go peeking through the windows.

My question is, if based on the current comps in the area, this is a real steal, why after a whole day on the auction has NO ONE bid on it? Should I take the hint and stay away too?

[Eddy Dumire]

It may very well be that there are people waiting to bid until the last few minutes.  It's a strategy that I've used some myself, and yes, the auction does automatically extend if you bid in the last few minutes so the strategy is limited in effectiveness.

Not being able to see the insides is a big risk and you need to factor that into your numbers.  You're looking at a property that is in foreclosure and someone is about to lose their home.   They may become resentful and trash the place.

You also need to consider the cost of getting them out.  When I purchased an occupied property, I paid $1,800 in cash for keys to avoid the potential for an even more expensive legal cost to evict.  Depending on local laws, they may be considered a tenant at sufferance (I'm not a lawyer) that you would have to have eviction proceedings to get rid of.

You can definitely make money here, but you have to be smart about it.  Automatically budget for paint, carpet replacement, and replacement of all appliances in addition to anything else you notice from the outside (roof/siding/windows/landscaping).  Pull up the property on bing maps and get the birds eye view from all four sides.  Then add on another substantial amount for unknowns.  In my area, I usually add $20k for unexpected expenses but I generally only buy houses about 25 years old or younger.  You may need to add much more to be safe.  They may pour concrete in toilets on the way out and pull every bit of copper pipe out of the walls!