Successful auction.com bid and offer to flip

[Alex K.]

I just got under contract today for a property listed on auction.com. It was on the MLS for $69k back in January. It was lowered to $58 then $54k just before auction.com got the listing. I did a pre-auction bid for $44k total and Fannie Mae accepted.

I thought this was a good cash flowing property at $69k but I could not finance it due to a zoning issue (zoned industrial but it's a house with a metal building on the property). So 6 months later it still wasn't sold and now I'm buying it for $44k cash and I'm happy. I got a call today from a guy who wanted to bid but didn't have the POF documents in time. He offered me $60k cash and a quick sale because his wife is in love with the place.

Some of you might say take the money, but if I wanted to buy it at $69k, why should I sell it for $60k?

My plan is to bring my property manager into it this weekend and have her tell me what it would rent for so I can run the numbers more accurately. It's difficult to comp since it's an unusual property. Someone could run a business out of the metal building since it is zoned for it and live in the house. I estimate $1000/mo. Would you keep as a rental or make a quick $16k - closing costs?

I asked the guy if he would want to rent it from me and he said no.

[Chris Clothier]

Alex -

Your answer depends a lot on your personal situation and your long-term goals. I really like the statement that you made about bringing in your property manager and getting additional information. It is a common mistake made by new investors (no assumption that you are - just a statement) that they do not take a little extra time to gather the info. needed to make a good decision. I would say if you are comfortable financially and are actively building a portfolio of cash-flow properties, this one sounds like a real winner. If you are in a wholesale mode and looking to turn properties quick, then it looks like you have a winner.

Either way, it sounds like you made a great buy with multiple options which is the classic definition of a great investment property.

Good stuff - Chris