I listened to a podcast a while back where the interviewee stated that he had luck using the online auctions sites and he had a steady stream of properties that he was acquiring with perceived ease.

I know that nothing in this business is easy, having said that I though, it cant be that difficult; the easiest part was actually becoming the winner bidder.

Let me explain, during the podcast the interviewee eluded to the fact that, most often, we are bidding against a computer and when we are outbid, it doesn't necessarily mean that it was actually a "human" bidding against us. I'm not going to go into too much detail, but everything is in the podcast.

I placed 1 bid over asking and waited, I was immediately outbid, I held firm, the bid ended and I received an email stating that I was outbid and that I had lost. However, the very next day, I received an email stating that I was the winner bidder and just like that, some say like magic , I won, now let the games begin.

I decided to hold the property in my corp, so, naturally, I forwarded the proper documents to the document service company; but, they where initially rejected, I had to ask for superiors, multiple calls, emails, faxes etc. After some hard deadlines that were magically extended, we finally came to an understanding.

We went back and forth over my personal bank statements and my biz statements, but at the end they accepted what was submitted. A lot of credit is due to my super broker, @Jerry Stanford Jerry went over and beyond to ensure that all the procedures where followed and became a critical part of the process.

Contract signed, escrow company selected, closing date disseminated, great. I ordered the home inspection, under the predefined contingency period. Nothing too egregious discovered, 30k rehab budget, ARV 75-85K, cake.

I acquire funding for the rehab; now, we are awaiting the closing, waiting, waiting, date comes, we get a new contract, full of lealize, essentially stating that the seller has the unilateral right to extend the closing by an additional 30 days, for whatever reason, right. Ok. No problem, we roll with it, some excuse about City water and City inspection and compliance issues, but we were assured it was no big deal. We were given a new date, my broker and I began discussing an exit strategy, just in case, we found one and we waited.

As sure as I am typing this, several days prior to the new closing date, we received a new contract quoting the same unilateral right to blah blah blah.

I responded to the escrow company stating that they had 48 hrs to perform or quit, evoking what we found in the contract that we felt would be an eligible criterion and create an exit of the contract.

The escrow company sent another email restating that we needed to comply but, we also restated what we found in the contract. Mind you, my deposit was hard and there was no way out of the deal unless they defaulted; so, we articulated that they were unable to perform and therefore they, albeit de facto, defaulted on the contact agreement by not closing at the prescribed time.

The next day we, my broker and I received an email stating that I was to sign a form and input a mailing address, thus terminating the contract and where to have my deposit sent.

Long story short, anything can happen in REI. Always read your contract, ensure you have an exit strategy have your team in place without @Jerry Stanford I would have been in bad shape.

I hope this story helps someone. Yes, I will try the action thing again, however, I would do things a little differently.

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Buyer Beware (online auctions)

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