First time investing- Live county auction good or bad?

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@Christopher Phillips Great insight! Thank you for taking the time to respond. All excellent points and I definitely did not realize it was cash buys.@Andrew Johnson Yeah, I knew there was a gamble aspect to it, but I'm probably going to look down a different direction as a first time buyer. Thank you for your response.@Michael Hayworth Thanks for such a detailed response and it's always great getting insight from someone in your area. I definitely think I will be over my head with this kind of investment as my first and I don't have solid cash. Maybe in the future once I get a portfolio built up and really learn the game better this will probably be the direction I go down.Thank you everyone for your timely response. This has DEFINITELY pointed me in the right direction!

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@Sarah McVeanHow much cash do you have? the auctions are cash payment. If you don't have the cash, you usually have an hour or two max to return with a cashier's check.second, homes usually come occupied.third, you need to conduct a title search at the country clerk's office... Auction properties come with liens. Try to do a drive-by of the property if you can. You won't be able to get inside, but you might be able to get a feel for what's happening. But be careful about it. Don't wander about the property, that's trespassing.Sales are "as-is" so there are no expressed warranties.Owners have a right of redemption period. That period can vary depending on why there are being foreclosed. 180 days normally. For unpaid taxes it's two years. So you have to understand the risks of doing improvements and having the owner show up to pay their overdue bills to get the home back.You should also check the bankruptcy records. Sometimes owners declare bankruptcy to avoid foreclosure and things can get tied up. I'm having that problem in NY with a shortsale.

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Trustee auctions are not for beginners.First, odds are that the house you have your eye on will get pulled before the auction. I buy in Tarrant County regularly. Usually, there are 300 or more homes on the list pre-auction, and less than half actually end up getting auctioned. If you're looking in Parker County where you're located, the numbers are much smaller, but the ratio holds true.Second, you can't get inside the house pre-auction. As @Andrew Johnson said, there's an educated guess component to it. I've probably bought 15-20 houses at auction. Sometimes, they come with nasty surprises. And people get auction fever and overbid, so you'll regularly see houses going for 80% of ARV, sight unseen. It's hard to buy stuff at auction for 50-60% of ARV anymore, so if you're going focused on one house, you'll be tempted to overpay. Maybe you luck out, or maybe it has a slab leak and you're fucked.Third, as @Christopher Phillips said, you gotta have cash. And in Texas, there's actually no "hour or two to come back with cashier's checks." You gotta have the money right then. If you bid and are even a dollar short, the trustees will look real disgusted with you and put it back on the list to be run through again.Fourth, if the house is a good one, there's a strong chance that the lender's reserve bid will be pretty high, because they believe they can make more money selling it as an REO. Roddy Foreclosure List service publishes a convenient list for all DFW area counties where you can get appraised tax value, estimated loan balance, original loan balance, estimated equity, and other key stats. Once you've done it for awhile, it becomes easy to recognize houses that are going to sell to the lender unless you're willing to pay full ARV sight unseen. Sorry to say that typically, these are the houses that look best to new investors.Fifth, there's the issue of liens and judgments on the house. A title search is the easiest way to find out about those, but it's expensive to do it for lots of properties. Tarrant County keeps all their records online, so I do it myself, but it takes some learning how to do it. Depends on the county you're looking at whether you can do that or not. You also have to understand which liens survive foreclosure, which don't, and which "sorta don't" (IRS liens).There's a real art to buying at trustee auctions. It's one of the few places you can get real deals in DFW anymore, but even there, if I go with 15 houses on my list, 7-8 will get pulled, 5-6 will go way too high, and I might actually bid on between 1 and 3, maybe take 1 or 2 home with me. I strongly recommend going and just watching for the first couple of months.Good luck!

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Sarah McVean Aside but having to have cash to bid/close there is an "educated gambling" aspect to these. Consequently, you need to have a solid contingency fund for any "what-ifs" that pop up. It's not like a typical scenario when you can back out of the deal after an inspection. "As is" is...well..."as is". The risk/reward has never been there for me (an out of state buyer) but if you really know the area, quality of residents, then you could make that educated gamble.

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@Michael Hayworth I'm also noticing the guy who has bought 15-20 at auction is a contractor ;) That has to help mitigate the "hurt" of a property being worse than anticipated. It can take it away but compared to a non-contractor I'd imagine you can sustain a higher risk threshold.

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Hi @Sarah McVean.. What kind of deals are you looking to get into? I've been picking up buy and holds from turn key providers in a few markets. I had been wanting to get into the DFW market but wasn't finding deals that made sense. I now have a property under contract in Ft Worth and looking forward to closing soon. Did you end up buying an investment?