All Forum Posts by: Mashal Choudhry

Also there is a new thing called "novation" and I am not an expert on this and can't comment on it. I have seen this, and unfortunately it was done poorly. It is interesting, but I can't comment on this strategy. For me, being an agent makes it so much easier, because all we can do is disclose disclose disclose. 

Interesting point!  I've never thought of a permission to show as wholesaling, but I guess it's fairly close now that you point it out.

I would focus more on how good of a deal it was vs how little it cost. I haven't bought a lot at auction but the best deal I got at one was:

Through the fog of memory (don't feel like looking up the exact amounts), in late 2021, I paid around 140k for a 4 bedroom single family detached property. I believe I put about 60k into the rehab which included adding a fifth bedroom to the basement. It appraised for 320k which is obviously a great spread but you have to remember closing costs, carrying costs, hard money costs and the cost of the refinance. When it was all said and done I still ended up being able to pull about 5 to 10k more out of it than I put into it.

Current mortgage including taxes and insurance is $1,519 and it's currently rented for $2,546/month.

Yes, you can buy a house at auction that you then flip and sell for market value.

And yes, I have participated in online auctions.

I think market auctions are better for newer investors because you're able to see the inside of the property and the property will be delivered vacant.

If you win you will have to provide a deposit that is held in escrow until the transaction closes. The amount of this deposit is going to depend on the auction itself. They will provide this information when you register for the auction and it is usually available in the listing as well. That deposit goes towards the purchase price. You will have to pay all the usual expenses associated with buying a property: transfer taxes, government fees, title company/attorney costs, as well as a "hammer fee" which goes to the auction house.

In theory yes, you could win something for a few thousand dollars. I'd imagine at that cost you'd either be buying just a shell of a property or raw land.

I have a few times. There are different types of auctions. The two types I've attended:

Foreclosure auctions. These are auctions that often literally take place on courthouse steps due to a lender foreclosing on a property due to nonpayment. You do not have the opportunity to look inside the house before bidding so you're buying sight unseen. You have to put down a large deposit if you win via cashier's check. You don't actually own the property until the sale is ratified by the courts as a foreclosure is a legal process though you are generally responsible for the property taxes for the property from the moment you win. Also, often times the original homeowners still live in the property so once the sale is ratified you have to go through the eviction process or offer cash for keys to get them to leave. So, lots of challenges and risk but you could actually end up with a good deal. You could also end up with a property that needs to be gutted from top to bottom after months of legal hassles. I wouldn't recommend this as a starting strategy for anybody.

Market Auction: There's probably a better term for this but anyone who owns a property can sell it via an auction. These are listed on the MLS through an auction house and you CAN go tour the property before-hand, often with a buyer's agent if you wish. The auction will often take place at the property although these days that's usually combined with an online auction that starts up to 2 days before the final bid is accepted. There is a suggested opening bid and a minimum bid increment.

When the physical auction takes place, bids will happen. The auctioneers will try to encourage action. When it seems like they have a final bid and no one is willing to increase it, they will often times go talk to the owner for a few minutes. The owner is under absolutely no obligation to accept any bid or to even sell the property. They will come back and give one last opportunity for bids. If there are some, it continues. If not, they'll announce the winner assuming the owner is happy with the result. Again, often times this requires a large down payment when you win to be held in escrow as things go to title. Also, there is usually a "hammer fee" which is a % of the total purchase price to be paid to the auction house by the BUYER.

Again, you can get good deals this way and you actually can tour the property beforehand so you generally know what you're getting into. In my experience, most properties that go to auction end up overpriced so I'd be prepared to attend a LOT in order to get something that worked on paper.

When I attended my first market auction with an experienced agent the advice he gave me was to figure out my maximum beforehand and stick to it (Seems obvious but people get caught up in winning). Also, don't bid until they are approaching your max. Wait until you're about 3 minimum increments away from your max, then come in with a 2X increment increase. Having someone come in late in the bidding process who is jumping by more than the minimum CAN help shut action down. This was just advice of course, no guarantees of results.

Regardless of the type of auction, once you own the property you can do anything legal that you want with it. So yes, you can fix and flip, or hold as a rental, or whatever.

@Preetinder Singh

I’ve been at coldwell, eXp, and am at Keller Williams now.

I’d say Keller Williams would be the place to start.

I wouldn’t recommend coldwell to anyone. Nice people where I was, but I’d recommend the other two comparatively.

 network, I can get as many as I want, all off market. I have done about 500, yes 500 all off market with zero marketing, just networking,