All Forum Posts by: Jenni Moore

This will be my first big deal purchase....owner financed, 2 bed , 2 ba in the suburban Kansas City, Missouri area. Right now the property is just over 1100 sqft, has a full, but unfinished basement, and 3 (THREE!!) car garage (1 car/1 door and the 2 car/1 door side). I'm looking for advice and suggestions on increasing the ROI. With this being my first property rehab, ideally I'd like to swing the BRRRR method.

I personally think 3 garages is overkill and not sure it would get me any more cash flow as a rental, whereas converting that 1 car side of the garage (it's closest and connected to the rest of the house) into another bedroom puts me in a new ballpark with it being a 3bd/2ba unit. 

I have yet to get bids, as I don't have access to the property just yet - so I have no idea what it would cost to convert the garage. Keep in mind, the property will STILL have a 2-car attached garage.

What are your thoughts and suggestions? Is there anything I should do to the basement that would be a good ROI?

Thanks so much for your time and help! I'm new here and new to all this, but I love this BP community and all the knowledge I've already gained here!

@Harry Metzinger

I'm glad to pass along what I've learned. 

The folks I've spoken with, at Auction.com, have been very pleasant and helpful. Although they've not come right out and said it, I have asked enough questions to hint at the insurance amount to get a general idea. For example - when asking "if I bid up to another $20K, am I getting close or even in the ballpark to win this property?" and their response will be something along the lines of "well, you're moving in the right direction, but it would take a few more bids like that to meet the reserve"......from this I can deduce that it will take at least an additional $60K to meet the reserve. I have yet to come across any properties on Auction.com that don't have an absurdly high reserve price (set based on the insured amount).

I've also read through all the available documents on each auction listing. I typically use the $ amount along with the coinciding date on the title to give myself a little scenario to theorize.....if it says in the title something like "....recorded on October 4, 2016 in the (County, State) in the amount of $106,879.52"....then I can see that it changed hands on 10/04/16 and that the bank purchased it for $106,879.52, and in theory they will hold it until they get a similar amount of money back out of it from the government insured mortgage. That said, I'm sure I'm jumping to plenty of conclusions here, but if the amount on the title is double what I would be willing to pay for the property, then I assume its not worth my time to pursue at the moment.

I do agree, there are deals to be had, I just haven't had that luck yet. My dad however has acquired 3 properties from Auction.com  - which he believes to have been great deals. He's encouraging me to "just hang in there and don't loose focus due to frustration"....got to love dad advice :)

Thank you all so much for the continued discussions on this topic.

I also, have confirmed that the reserve price (which seems unrealistically high, much of the time!) is set based on the value of the government insured mortgage amount. The lender/bank is required by law to offer at auction prior to claiming the insurance amount. The insurance certificate will mature about 6-10 weeks after the bank takes possession. During this time period, the auctions end and then relist repeatedly, never reaching the reserve price. 

Typically speaking, it seems that a lender might consider the high bids and readjust their expectations for the property reserve - but when they have an insurance policy sitting in their back pocket, its not much motivation!

I'm incredibly frustrated by this process, but as I come to understand it more fully, I'm learning that it's really a waiting game....I stalk, I bid, I stalk some more....

@Mark Gallagher - thanks so much for the incite! Is there some indicator I'm missing, or how can I tell "what kind" I'm bidding on? 

@Rich 

@Rich Baer - Thank you for the recommendations, I will be looking at these other sites as well! I will definitely be in touch and hopefully sooner than later : )

Is buying auction foreclosures a good place to start or is there a better source for investor properties selling below market value? 

Thanks so much for your time!!

@Rich Baer 

Can you offer some suggestions on other auction sites? I too, am frustrated with Auction.com for the unreachable "reserve" on many properties.

Thanks in advance for your time and advice.