Using Auction.com to make wholesale deals

[Steven Tucker]

My partner and I are trying to build some capital. I am new to the investor world. She is not. But she is new to wholesaling. 

We know that doing Wholesale deals is where we should be looking at to make some capital as its low risk. I have some questions regarding gaining leads. I have read some articles on here. But I couldnt find an exact answer to my questions.

With auction.com, if a property is set for auction on feb 14th, Would I be able to go to the address, Talk with the owner, explain who we are, and that we are looking to buy a house. Try to see if they are looking to sell their home. Try to get them to tell us they are in foreclosure. Find out why they are in foreclosure. Offer to make back payments to make them current to prevent the foreclosure process and to buy their home for what they owe on their mortgage plus a cash for keys. Make a contract with them. Then to assign the contract to someone else?

 With Numbers-

on auction.com subject property (not REO) est debt is 93k

Est starting bid is 75k

Est value based on comps are 240k

We talk with owner, they are 10k behind. We offer to pay the 10k to stop foreclosure process + buying the remaining loan amount, and offer to pay closing costs. then offer 10k cash for keys. We do our home inspection est 20-30k in repairs. we then assign contract to someone who can flip the house. with having a 30k assignment fee. Owner/seller gets 113k (10k for back payments,93k to pay off mortgage, 10k to vacate). We make 30k, we sell contract to buyer/investor for 143k. Buyer pays the 30k in repairs costing them 173k, but ARV is 250k. I am sure this is flawed. And could use some guidance. Just wondering if this is possible. Any room for improvement on this theory would be appreciated.

[Lydia R.]

Steven it depends on whether or not auction.com is selling the house as an REO property or if they are acting as the trustee and auctioning the property at the trustee sale. Here in TX auction.com does both. So yes in theory you could look at the list of properties coming to auction and try and reach the homeowners and try to purchase the property from them. If your angle is to wholesale then you might be leaving it too late unless you are going to come up with the funds to bring the loan current and stop the foreclosure. If you dont have the cash to bring the loan current and stop the foreclosure then the foreclosure might occur before you have time to find a buyer, let the buyer inspect the property, get the contract to the title company and get clear title all before the property is auctioned. My suggestion would be to find these people prior to their property being posted on auction.com