My First Auction- Advice Needed!

[Kelly Kormos]

Hi- I found out about a property that will be on my county’s courthouse steps in a couple weeks. I own another unit in this development. Lived in it for the first 5 years and have rented out for the last 5 years. Very familiar with the units and this development is increasing pretty rapidly in value. I want to try and get this unit but I have never participated in this type of in person auction. I have the cash to purchase it and I am working on figuring out my max offer (using BP tools)even though I will not be able to view property prior to auction. Want to flip it bc doubt I could get it low enough to rehab and hold (BRRR). Nashville too hot for that many times. Any advice on figuring out the max offer, the actual auction, or really anything dealing with this?? I have called the HOA to find out if delinquent there. Can get my title company to run title search (I’m an agent so have one that will do that for me). Anything else I am not thinking about as part of my due diligence? How do you estimate repairs on unseen properties? Any and all advice is appreciated! Thanks for your time. Kelly

[Tom Gimer]

Originally posted by @Kelly Kormos:

@Tom Gimer Thanks! So I have my title company running a search and reached out to my HOA contact for any past due there as well. and when you say updated, do you mean run it now and then again right before closing? I talked to a buddy of mine that has gone to the homeowner prior to auction and purchased directly from him. Looking at tax records his last refi was 4 years ago right at about my max purchase price (unless I am able to see the home before auction by contacting the owner and that changes). I want to try this because it would probably go for more than that at auction if bank needs to recoup that money plus make a profit??? Thanks for your help!!

Yes, if you are purchasing prior to foreclosure your title company would update their search prior to closing/recording.

If the last refi was 4 years ago, very little principal has been paid down and you can likely add 1+ years of overdue payments to the bank balance. Then add any other unpaids, judgments, liens. I think this unit probably needs to go to the auction block, but that's just me.

Banks don't try to make a profit. They just try to recoup what is owed. There is a point at which some will let a property sell for less than the balance.