Due Diligence Process for Auctions

[David Burton]

Hi, I am exploring the possibility of buying a property (Flip or BRRR) through an auction. I would like to do it locally so there are two county's in my area I am exploring (Bucks and Montgomery County, Pa). I was wondering if anyone has a detailed process they follow when analyzing these details and narrowing down the focus? Currently, each auction has approximately 20 - 30 homes on the docket. In observing previous auctions, may of these will not even make it to a bid. What are some tips to find the ones that are most likely going to sell and what should I be looking for in the process? Thanks.

[Lynnette E.]

Originally posted by @David Burton:

Steve,

Yes, I believe you are correct.  These properties cannot be inspected beforehand and many times they have tenants living in them so you may have the hassle of having to evict them.  What I am trying to learn is if there is a systematic way to learn if the home is occupied and what other "baggage" comes along.  I see you are in Pottstown?  I was actually there today scoping out a property that is up for auction.  Where are you investing now?  If you are ever interested in connecting to collaborate let me know.  I am very interested in pursuing some flips in the area.

 I buy properties at auction.  When I am trying to find out if a property is occupied I go on trash day and see if anything was put out the night before and the morning of trash day.  I also drive by at different times and look for lights, vehicles.

Know that even if it is occupied that does not mean that the house is 'livable' as some people can live in a real dump!  I bought a lived in property that was so flea infested that the building inspector would not enter, nor would the police officer after it was broken into.  But bet that thieves had itchy welted legs for a while!  That property had no heat/air, mold growing on the walls, a fallen in wall, a floor that was sinking into the crawl space, awh, but the roof was new and excellent!  Dumb, dumb me!  Now I still can not believe that someone put a new metal roof on a house with a wall falling in, mold, and the floor falling in!

Get it for a good enough price you can survive the crisis you may find!