In past articles, I’ve talked about how much money you can make – with very little cash outlay – from investing in foreclosure homes. I’ve also mentioned that buying preforeclosure homes is generally a little easier than buying a property at the foreclosure auction. But despite the fact that a foreclosure auction may seem a little more complicated, you can still get great bargains – and profits – from buying a home at a foreclosure auction.
Though you may have more bidding competition, sometimes, the foreclosure auction offers your only opportunity to buy a great property. Perhaps the seller was unreachable before the auction. Or maybe he was reachable, but wouldn’t sell the property to you. At the foreclosure auction, it’s still possible to get the property for a rock bottom price.
Though the auction can be more of a gamble as far as whether or not you end up with the foreclosure home, it can also be well worth your while – especially when the property in question is one that you know is a peach.
When a preforeclosure home reaches the auction phase, the bank is willing to auction it for sometimes ridiculously low prices. Why? Because they don’t want to be stuck with it. The bank isn’t in the real estate business, and doesn’t want to own foreclosure homes, so they’re willing to let them go for very low prices at foreclosure auctions, just to close their books on the properties. While this can sometimes mean stiff competition for those bargain-basement-priced homes, it doesn’t mean you won’t be the one walking away with the deal.
And what if you’re the only bidder who actually shows up at the foreclosure home auction? This real estate investor’s dream happened for me recently, and enabled me to buy a property for half its value, then quickly resell it for a nice profit.
I attended the auction for a $130,000 condominium in Northern Virginia. The bidding started at $57,718. I bid one dollar over the opening bid, and since NO OTHER BIDDERS SHOWED UP, I paid $57,719 for this $130,000 condominium in a good location. I had an investor lined up beforehand, so the same day, I sold it to the investor for $68,000. That’s a profit of $10,281. Not bad for just a few hours’ work.
Since thousands of foreclosure homes all over the country are auctioned off regularly, imagine what an auction and a few hours of work could do for your profits!