Planning to buy my first property at auction. I'm nervous!!

[Cody Beard]

The House:

There is a duplex in my home town about to go up for auction next week. I've reached out to my realtor and got some comps and a good idea of the value of the home. It's already rented out and brings about $950 gross /month. The value of the home based on comps is between $50k and $55k. I'm planning on doing a Brrrr style strategy, but with not very much rehab. I may need to add a new HVAC and maybe a few cosmetic things, but someone already lives in it so it can't be that bad! My realtor is going to get me in to take a look at it too so that's great! I didn't know you could do that on auctioned homes.

Financing:

I've contacted a hard money lender that I feel fairly comfortable using. WCAP Lending is the company. I felt pretty comfortable after talking with them over the phone. I could get 50K as a line of credit with 12-18 months 0% interest. My plan is pay no more than 27,500 for the home at auction. That gives me enough room for surprise capital expenditures and gives me a little comfort on my first deal. And of course afterwards I will re-fi in 12 months or so and take a regular mortgage with 25% + equity built in.

The part I'm worried about is the auction. I have a good understanding of buying a home in a more traditional way. But I've never done an auction, never been to an auction and have no idea what to expect. By running the numbers I know how much I can pay for the home. The other concern is the timing with the hard money lender. The auction company requires 20% down and 30 days to close. I can do the 20% but here's the catch. The lender says I can qualify for between 25 and 150K. He said $50K seems to be a popular amount for new investors and as long as you have a good credit score it shouldn't be a problem. BUT it's not guaranteed. It takes two weeks to be approved and get access to the money. I don't want to go ahead and get approved because the 0% interest starts as soon as I'm approved. So My idea was go to the auction and see if I can even get it for that, then pay the down payment and start the loan process which takes up to two weeks. My question is what happens if for some reason I don't get the amount I need? Do I get some kind of penalization? Or does the house just go back up for auction?

This will be my first deal and I've just got the newbie butterflies. I feel like this would work but there are just a few things I'm not 100% sure about. If anyone else thinks this is a good or bad deal please let me know! I appreciate any help and advice anyone has :)