OfflineI was inspired by Dean's book. Very inspired. Currently, I am a real estate agent, so I do have some knowledge. But regarding buying auction properties and fixing them up...I know little.
Well, as you know, the market is rough for agents. My savings are almost completely gone. I have 3 k left and that is it. I am about to tap into my credit cards and I am freaked. No income and a small baby. Fabulous.
So, I found a very small property on the auction block. I doubt very much that it will be bid high on. So I might actually get the property. Starting bid is $1000 and I don't think it will go for more than $5k and that will be as high as I go. The property has been listed for the last several months with no warranties to its condition, in other words, "As-Is" for about $50k. And it is actually cute as punch, just very small. Only just over 400sf. Still, no one has purchased it.
What makes me nervous is if I buy it, fix it up as cheaply as I can, will I be able to sell it? If I sell it for the same price, I stand to make $35k around. Which would be great. But will I be able to? It had been sold, a few years back for around $90k which is unbelievable.
I will be doing the upgrades myself to save money. It already has a new roof, new boiler and new vinyl siding which is the clincher. The capital improvements have already been taken care of. But if it isn't selling now at such a low price, will I be able to sell it for $50k?
If I don't have a quick turn around, I'll be in big trouble. So, any thoughts? I know Dean's book says to face the fear. Well...I think my fear is winning the battle!! HELP! I NEED ENCOURAGEMENT!
Or a small loan. I'll take either. 
Welcome to the DG family, so glad to have you here. Let me tell you about my first deal on my own, it was actually my second deal, but the first one on my own without an agent, using my own contract. I made many mistakes, I signed the contract as the seller instead of the buyer I was so nervous. Every time I called an ad I was nervous, everytime I asked questions I was nervous, everytime I forgot something I was nervous. My point is, you're going to make mistakes, but if you never try how will you ever face your fears? I know what it's like to have NO support. You just have to dig deep inside of you and pull it out of yourself. Keep asking yourself "Why not me?" If other people can do this why not me? You have the support of all of us on DG.com, try to remember that.
God bless you,
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Like Lena said, it's great to have you here as part of the DG family.
Now, as a realtor, you have the best access of anyone for getting recent comps. You will have a good idea of what you might be able to sell the place for. In my view, since you would have little invested in the property, this would be a great one to start with. If you can pick it up for $5K and say you have to put another $10K into it (is that what you were figuring for your $35K profit?), you could make as much as $35K, but you are already in the range of being able to assign or wholesale it, OR you have a lot of room to reduce your price for quick sale and STILL make a nice profit, OR it could possibly be held as a rental (what could you get for rent?).
PLUS you would have the experience of buying at auction, meeting other investors, doing rehab, etc.
But that's just my opinion. lol
Sounds like a winner to me.
I wish you well, and please keep us posted on your decision and the progress. We look forward to hearing much more from you and cheering you on in your REI!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Hi, I am also a Realtor, who is getting involved in investing. As agents, we have many advantages. As Rina said, we can pull our own comps. We can also visit listings at our convenience. We can also add our commissions to the profit line on the investment. Our cost to sell, through an MLS listing, is half of what other investors would have. When we find buyers that other investors would get a finders fee on, we can collect a commission, which would probably be much higher than the finders fee. We can still wholesale properties. We already have Mortgage Broker, Home Inspection and Title Company contacts. Probably the biggest plus, is that we don't need to find a good RE Agent who understands investing. You will see why that is important if you read through some of the related posts on this site. Contact me if you have questions.
I wish you much success,Al
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
Frank Outlaw
Thanks for the comments. Oh yeas, I understand my advantages. I have pulled comps, or tried since there is a lack of true comps. And I have already visited the property on my own to inspect it. Honestly, the big updates have been done. The person who was foreclosed on spent the money on the cap improvements but was listing the property as much too high of a price which is why it was never sold. For the past several months, the bank who foreclosed has been listing the property at about $50k. It hasn't sold to a home buyer probably because of the no warranties issue. And the cosmetics. I could rent it, but I need more monthly income that what the rent could afford me. I have also thought of a rent to own, but that is not in my budget right now. I averaged a $35k profit in my head by thinking of selling for $50k after improvements of only $5k (because that is all I can do) and then figuring a price haggle or credits to the buyer. I can reduce the price further for the quick sale.
I have been searching and searching for comps and the only thing I can say is that I am worried it will not sell just because of the market.
Also, it isn't guaranteed that I will even get this property. Someone could decide to bid higher than my cap on it. Hope not! So I am praying....
If I get it and fail to move it, I will be hurting!
Are there no comps, or only REO comps? I have found, in my area that 80% of sales are REOs. They are my competition. I use those to set my value. Then I am more competitive, in my market, because most buyers do not want to deal with the banks.
Good Luck, Al
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
Frank Outlaw
Nice, thanks for that tidbit. That made me feel a little more confident because that was a factor I didn't even think about.
Just as Al mentioned that you have all the advantages. You have access to MLS and other services that we investors can't tap into it, but i'm so glad that more realtors are taking up real estate investing. As far as the property you're looking to bid on, i wish you the best. I think the best thing you have stated so far is that you set a limit of what you want to spend on it. Some people when they go to an auction, they get caught up on the bidding war that they lose track of their main objective. Now whether you are the winning bidder or not is unknow but that sound like a great deal. I pray and hope that you will get it. The only way to overcome your fear is face it straight on and sounds like you're taking that major step. Good luck and keep us posted.
Lloyd
I'll let you know next week if I won it.