First investment in Baltimore city

[Dakota Lawhorn]

Hi, I’m really interested in a home that could possibly be rehabilitated and made in to a rental. It’s starting auction bid is 5,000. There are actually a few homes with this starting bid. The row house is not in the safest area. This would be my first property so I’m not sure if it’s a good idea to try to get the house and flip it due to location. The zip code is 21217. 

[Tom Gimer]

@Geordy Rostad You’ve described some of the issues bidders might face with foreclosure auctions. I’m fairly certain that is not what Dakota is considering. 

In Baltimore, public auctions are quite common. Sure, there will be competition on desirable properties sold absolute or with a low disclosed reserve... but the rest of the negatives raised do not apply:

2) unless the property sells pre-auction, it will definitely be offered, because the seller has invested in the advertising campaign

3) banks are not a party to the sale

4) you can inspect the property

5) you will know if the property is occupied, and if so, the existing lease terms

6) most auctions require only ~10% on auction day, balance at settlement within 30 days

Auctions are actually a great way for investors to buy properties for rehab... as well as to meet other investors active in particular areas.