Can you beat this???

Question

I'm ramping up to maybe start buying at foreclosure sales here in FL. I've now attended 2 . Yesterday, a home I looked at in Cape Coral, FL went to sale.  I went unprepared to buy, but had looked at a property and determined top value I'd pay. The loan on it was for $260K plus change. No chinese drywall problem. I would pay a max of 56K. 4-2-2. It went for 52K!  That is 1/5 of loan balance or $.20 on the dollar.
     Anyone top this? I'll be attending wed auction prepared on 2 others , if they go through. Rich

Jeff B. · Answer

That's a pretty good deal.  Did you go online and check for a UCC or lien on Sunbiz?  In Palm Beach County contrary to what you may have read there are a lot of investors buying property left and right.

The one thing that puzzles me is you talk about the loan balance?  I don't care what someone overpaid for a property in 2005, 06, and 07.  I only care about how much money I can make rehabbing and flipping, or buying and holding the property.

Steve Babiak · Answer

I'll assume you mean at the sheriff sale, and not REO or private sales (as those are not on-topic).

Every month there will be a handful that are good deals that actually come to auction (not postponed or delayed), UNTIL the bidding frenzy kicks in and the prices go bananas.  So there are a handful every month, that would be good deals if nobody else showed up to bid...

I choose to keep my nose out of those frenzied bidding wars, because that just causes you to end up over-paying.

The real challenge, I find, is to locate the nuggets that won't end up having multiple bidders AND that will have been discounted enough by the lender with their opening bid.

But I will answer your question directly now.  The last really good one was a few months back, where the debt was over $100K, bank opened at $20K, winning bid was at $25K; not in my normal desired buying area, so I did not care to bid, and have no idea of actual values.  But I think the fact that there were multiple bidders, and that if it rented at $950 per month or so (Sec 8 pays that in that area), that somebody got a money maker.

Rich Weese · Answer

Rod- last friday of 7 properties earmarked, only 3 came to bid. Of those, I would've bid on one that did sell. Today, only 2 properties. I was prepared to go 70K and BANK  bid 77K. The other was way over my target.

Steve- when was the last time you saw a good deal? What were the particulars? Rich

Rod Wiggins · Answer

Rich,

I'm curious to know how the next auction went compared to what you were prepared to pay?

Rich Weese · Answer

Eric- I can see you don't post much. This isn't a pissing match. If you think it is, go back to the posts and find it. If you're on here more and post more, you'll eventually get differing opinions. That is what this thread was created for. You can go to political thread to find real urination, imo. Rich

Steve Babiak · Answer

Rich,

I have posted this elsewhere when you requested feedback on what we were seeing, so if this sounds repetitive...

There are certainly discounts being made available at the sheriff sales in my area - I consider them sort of as a last ditch "short sale" by the bank.  I have only seen a couple of properties discounted anywhere close to what you mentioned at the sheriff sale, and those were in areas I consider marginal at best.  On one of those, debt was over $100K and the bank started the bidding at $20K.  Of course, my area did not experience the price inflation that the bubble introduced into the market where you're now looking to buy, so the values won't be dropping as much near me.  I couldn't even venture to guess what the new values should be for your market as compared to bubble values.

Eric M. · Answer

I won't try to compete in the pissing match here, but I'll just say that in my experience in Chicago, when I see a 1 off deal that looks really extreme (like 80% off the loan value), when you investigate the history it is usually a case of fraud somewhere in there.

Rich Weese · Answer

Dan- my blood pressure has been fine since I lost 212 pounds. Whatever someone posts here is a drop in the bucket to me "investorhood", whatever the heck that is? Congrats on your deals, although your second example makes little sense.
    No matter how I add the #'s, I can't get see this one being better than my example. That is what the thread was.
    The 20% doesn't seem to be the new benchmark, based on having received only ONE specific example out of 51,939 BP members. Rich

Rich Weese · Answer

Jeff- Yes, of course all liens were checked out. Again, the 20% figure was put out ONLY as a comparison bar for others. Remember, the thread name?

Dan- again, the 20% was only for comparison purposes. If you know of a SPECIFIC deal that beats this one, bring it on. That was the thread name. This was for fun and see what is actually going on elsewhere. Rich

Rich Weese · Answer

Jeff B.- Good point. I was just using it as a comparison bar for other areas. Rich.

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