Courthouse, Bidding to Buy

[Tim Steele]

An amazing buy opportunity came this week. I have been investing in single family homes for about 10 years. In 2020, my wife and I moved from Iowa to Jackson, MS. I have spent the last 10 months learning local real estate and the 2 months trying to understand local courthouse sales.

I am not new to courthouse sales; a bulk of my experience is from foreclosures. New city, new rules. New Book - Bidding to Buy. Always looking to refine and enhance my process, I picked up the book. (Excellent, by the way. I highly recommend it.) In the book, they tell a story of buying their first courthouse property. After winning the auction, they visit the property. Before entering, they are approached by a realtor with an interested buyer. A deal is struck and the property is sold before they even walk through. Must be nice, I thought... I had a similar experience this week.

For 2 months, I have been tracking auctions, preforming due diligence, showing up and preparing to strike. Usually, I sit on the sideline watching. This day was different. Three investors and a neighbor show up for this auction. If you have ever been to a courthouse sale, there is usually someone attending just to watch. Curious about the process. Curious about the house. Curious why a group of people are huddled together. The sale starts, and the opening bid is well below my number. One of the other investors also really likes the property. We bid it out leap frogging the bid higher and higher. The bid amount grows and the other investor concedes. The dust settles, and I won the auction. Paperwork gets signed and the deal is done. I have my first foreclosure property.

The neighbor approaches me. She very interested in the property. She and her mother would have bid at the auction but just did not have time to prepare. She tells her story. Her mother is aging, and she would like to move her next door. Already familiar with the property, they are ready to make me an offer. They offer $30K above my purchase price. Of course, I accept.

This is win/win for everyone. For me, I will make my projected profit without doing any of the rehab. I projected $50K in rehab to reach the maximum after repair value (ARV). For them, they are still buying at a discount. The real estate market in the Jackson MSA is just as hot as markets in Florida, Texas, or Arizona. When we came to agreement on the deal, there were tears of joy. It warms my heart to be a part of this deal. I understand what this means. To have an aging parent living next door. To be able to quickly provide comfort and security while maintain independence. I hoped to be able to do the same with my parents.

Real estate investors get a lot of criticism. A majority of us are out there doing amazing things, solving problems and touching lives. Anyway, that's my story. What’s yours?

“Haters are confused admirers who can’t understand why everybody else likes you.” Paulo Coelho

[Courtney Fricke]

Originally posted by @Paige Hutchinson:

That is an awesome store thank you for sharing, I am interested in bidding also but I am leery because I have been told to be cautious especially in a judicial state because the previous owners have a year to buy the home back??? I would love to hear what you know about this.  I'm in Louisiana, thank you!

Hey Paige, I am happy to help here in Louisiana with discussing from my experiences. The judicial laws are state wide so learning the process helps but each parish may just implement it a bit differently. Thus far, I have not been aware of the buy back for a year from homeowners and I have even been the Plantiff sending a property through the local foreclosure auction. There are liens that have the ability to do that such as the IRS, HUD, etc if they are not paid off in the transaction. So buyer beware on that front!