Getting Started with Flipping

[Voytek Branach]

Hello BP Community, I am fairly new to BP but want to thank Josh, Brandon and the whole team for their amazing work. I am a contractor in NYC and would like to get into real estate by flipping houses in Long Island NY - Nassau and Suffolk counties. (New York City is just too expensive for me). I am interested in buying foreclosure properties at county auctions and Town Hall front steps. I have been to a few of them in Nassau and Suffolk county to get some knowledge, information and to see how they generally operate. Can someone help me understand how the foreclosure auctions work? I understand that I have to do my due diligence on the property, but not fully understanding what I am buying scares me. Also, are these foreclosure auctions best way to find deals in Long Island? Appreciate all responses and thank you in advance for your help! Best, Voytek

[Andrew M.]

I can't speak about the specific area your looking to buy in but I'll just comment in general about my experience going to foreclosure auctions.

My overall exposure with buying foreclosures from an investment standpoint has been negative. I've found that banks are not willing to negotiate, they're stingy and oftentimes unreasonable. For example even if you do an inspection and find issues with the property they don't care and usually aren't willing to lower the price. A retail buyer may find a nice home for a fair deal but it's usually quite difficult for a flipper to find many steals.

Also there's a large amount of competition these days for foreclosures. Other investors and retail buyers will both be bidding against you. The properties are almost always listed on the MLS so everybody's gonna know about the auctions well in advance.

And finally it really limits how you can buy the property in most cases. In other words there's not a lot of room for creativity. They're gonna make you put down earnest money, you're probably gonna have to pre-qualify for a mortgage (unless your planning on buying with cash), and even if you don't have a RE agent don't expect to recapture the commission you would otherwise be paying them because in my experience banks generally aren't willing to do that for whatever reason.

Just my 2 cents. Hope it works out for you.