What strategy do most investors use to determine which properties to bid on?
Prior to an auction, I have been performing due diligence within a selected area. I determine if the beneficiary is foreclosing on the 1st trust deed, drive by the property and take photos, find comparables to determine fair market value and underwrite the property to account for all expenses (taxes, insurance, capital improvements, selling costs, profit, etc) to find my max bid. However, I am finding it necessary to look at each property the morning of the scheduled sale to make sure it is in the same condition as when I underwrote, but the vast majority of sales are being postponed. This is time consuming and frustrating. Is there an easier way to go about this? I assume some of the pros have direct contacts at trustee companies/banks/ or at the foreclosing beneficiary that they can find out what properties are actually going to sale. It would be good to get other investors insight. I have not bought anything yet but hope to soon. Thank you.
Note, I am located within the tri-counties area of California (Ventura, Santa Barbara, San Luis Obispo).
Hi Newbie, Sounds like your doing everything correct, including driving each property prior to the scheduled sale date/time. Most investors spend a ton of money and time on staff to drive properties all day long! In fact, some drive the property just before showing up to the auction. The benefit of viewing the property absolutely outweighs the cost of a bad, burned down or vandalized investment. Remember, trustee sales are sold “as-is”. Despite your assumption, the trustees, banks or beneficiaries do not release sales price information until authorized by the beneficiary, usually only minutes before the sales time. Once the bid authorization is obtained from the beneficiary, it is almost immediately relayed to the sales auctioneer and posted on the trustees and third party website, like foreclosureradar. Patience and hard work are the key to a rewarding payoff. Sorry, the postponements are part of the game. As far as strategy: find a few properties, track the status of each and do your research. Good Luck.
Thanks Mike! I’ll just expand on Mike’s last sentence a bit, by saying that I really recommend picking a niche where you feel you can build great expertise than anyone else as that provide competitive advantage. Whether it is by location, price range, property type, or something else, having a niche is key as there are just too many properties for anyone to look at them all these days.