Forclosures/Auctions Investing Good or Bad?

Question

What’s up BP Community!

So I am currently shopping for my 1st investment property! My Loans of choice that I am considering is a 203k loan or a Conventional HFA Loan. I was  wondering and curious to seek information on Auctions and Forclosures for my 1st property investment. Are there any members that are familiar with the buying process or have any experience regarding these types of properties. Thank you all in advance and appreciate any type of information posted!

Jonathon Nila · Answer

@Matthew Porcaro Great advice thank you Matthew for the information! 🤟🏽

Matthew Porcaro · Answer

@Jonny Nila

Foreclosures are great, auctions are typically not good for first time investors... or renovation loans like the 203k.

Auction usually requires you to put down 10% cash at the auction steps and you need to come up with the rest in 30 days.

That typically never works for financing, too much to do in a short amount of time, especially if you’ve never been in the property.

There’s enough out there to avoid auctions.

Bill Phillips · Answer

If you're talking about the foreclosure trustee sale, that requires cash. You could maybe find a partner that has cash. On something like an REO auction, like you might see on auction.com, you usually have to put down earnest money, and then, there is no way to get out of the contract. If your financing doesn't come through, you lose your earnest money. You could find a hard money lender or partner for that.