Thoughts on sheriff auction

[Joe Robinson]

What are thoughts about buying a property at sheriff auction?

This property looks to have potential, but what are the risks in this type of deal?

https://www.kingcounty.gov/~/media/depts/sheriff/documents/services/Civil/Real_Property_NJD/5-17-19/17-2-24555-1_KNT.ashx?la=en

If the judgement debtors redeem the property I’m assuming I get my money back.

I would love analysis on this auction in the morning and whether I should got try this.

Thanks

[Ryan Ingram]

Hey Joe, I think that is a great question. 

I am knee deep in rehabbing a property that I just purchased at a Sheriff sale and I've previously done two others. I think the biggest risk of this type of transaction is that you aren't able to see the interior until after all of the slow government paperwork is settled. 

The current rehab project that I'm doing ended up being worse than I imagined. It was a lower valued property, an ARV of around $30,000. I was only interested because I already own the property next door. At any rate, I purchased it at the Sheriff sale for $9,500 and I assumed I'd only have to do paint, flooring, kitchen, and bath. Unfortunately, there was a large hole in the roof, 3 inches of dog poo throughout, and mold all over the plaster. As you can guess, it wasn't salvageable and turned out to be a complete gut. When all is said and done, I'll probably be upside down around $10,000...but I plan on holding onto it for decades to come, so I won't worry about it too much.

The other two that I have done in the past worked out just fine. $5,000-10,000 in each of them made them just like new and they are currently housing two super happy tenants. 

I haven't had any not work out after I won them at the bid, so I can't speak to what happens if someone actually attempts to save the home from foreclosure. However, I'd be happy to try and help more, if needed. I'll definitely be following this to see the remarks of others. After this last one, I'll most likely be gun shy at these auctions for a while :)