Have you bought a property at auction? School me please

[liv2ski]

Thanks for dropping in. Long story short, my oldest has been saving her bucks to buy a house and found a repo that is being auctioned off Friday morning on the court steps.

I went through it with her and didn't see any obvious deal breakers, but what do I know. Power and plumbing are off, so I could not check everything out, but it looks like it needs a new roof, the heater is older than fuck and it obviously needs paint, flooring and refreshing of the kitchen and baths.

Checked the title and the property taxes are paid current. So besides the winning bid and the above repairs, what else could I be on the hook for if we win this home?

Ya, I know. Have cashiers checks with me to pay for it if I win.

Thanks for your time.

[N1CK.]

How old is the house?

[liv2ski]

Built in 1962

[Buster Highmen]

I did it. House was build in early 1900s on a shitty foundation that was sagging and eventually collapsed.
We scraped it and built new. The price at auction was less than comparable lots, so it's a win.

[Mazderati]

Liens? Deed restrictions? Easements? Future plans for the surrounding area?

[N1CK.]

Built in 1962

Asbestos and existing code violations could both be relevant if kiddo intends to update

[Mazderati]

And lead paint.

[liv2ski]

Property is built on a slab foundation and there were no obvious cracks apparent from a perimeter inspection. I hear ya on the lead paint and asbestos issues which are no biggy from my experience.
Only lien is the note with the lender, taxes are current.

[N1CK.]

Could you find out if any electrical work had been done under a permit in recent years?

[::: :::]

you should probably assume you're going to replace all the infrastructure: water service size, piping, upgrade elec service size, all wiring, heat & a/c
while you're at it, upgrade the insulation and windows & roof and make it seismically up to date
basically a gut renovation
check in with the GC's in your area for pricing

if it's slab on grade, i'm guessing it's someplace warm so at least that will make it easier to insulate.
you're in socal, right?
not sure if sprinklers might be in order...i know new residential constr in cali requires them now

& haz mat as noted above

after all that, the finishes and fixtures will be the cheaper part of the project


if you're up for it and she wants to stay there, check out the adjacent zoning to understand what is allowed by rights. Not so much for your site, but for what your neighbors are allowed to do that you have no say in...

[TWINS]

If it looks good and is priced right go for it. I am sure you will have competition from flippers though.
Keep the city inspector out of it. Asking for major problems if you get them involved in any kind of remodel "unless you are adding square footage". Our condo in Mammoth was a foreclosure auction. We kept the inspector out and its all good. One of our neighbors got the city involved and got fucked over with changes.

[RShea]

Thanks for dropping in. Long story short, my oldest has been saving her bucks to buy a house and found a repo that is being auctioned off Friday morning on the court steps.

I went through it with her and didn't see any obvious deal breakers, but what do I know. Power and plumbing are off, so I could not check everything out, but it looks like it needs a new roof, the heater is older than fuck and it obviously needs paint, flooring and refreshing of the kitchen and baths.

Checked the title and the property taxes are paid current. So besides the winning bid and the above repairs, what else could I be on the hook for if we win this home?

Ya, I know. Have cashiers checks with me to pay for it if I win.

You have to find out the terms- typically at Auction you have an immediate deposit of a specified amount required and x amount of days to come up with the balance. Since you have no idea what it is going to sell for or whom your competition is there is no way of being able to settle up at the close of the auction. Once you know the terms and process, do you have money set aside for the final purchase, probably will be a struggle to finance based on the fact that there is no inspection etc.

Want to know a general idea of what immediate improvements required will be running, so if you have a knowledgeable contractor you can trust or someone at least able to do a walk through with building or inspection background (appraiser or real estate broker maybe even) and give you a low to high range do that.

Others have mentioned the hazard issues- lead or asbestos, other issues could be other liens and if it is worth a title search before or at least visit to the local courthouse to check for any title liens besides the one lender mentioned.

[GeezerSteve]

I've had clients make money doing it and others who regretted it. As the old pros say, you make your money when you buy the property.

Is it a non-judicial (aka trustee's) foreclosure sale or judicial foreclosure sale? If the latter (rare in states with non-judicial foreclosure) the owner/debtor might have a right of redemption.

Sounds like you pulled title and determined that the DOT or mortgage (you said "note" but. . . ). Any restrictions, covenants or easements of concern?

Typical process around here is for the lender to bid in the amount of the debt and then the vultures start bidding. Watch 'em closely. If the market is anything close to hot, there will be some old pros at the auction.

[liv2ski]

Oddly the auction was postponed until March. It appears that may have happened in 2014 also. So the property has been vacant 2+ years?

[digitaldeath]

you got the cash?

[liv2ski]

you got the cash?

Really???

[GeezerSteve]

Oddly the auction was postponed until March.

Not so odd. Continuing foreclosure sale is common. Could be any of several reasons, e.g., possible workout or problem with service of notice.

[LightRanger]

What Steve said. I see Sheriff's sales and tax collector sales bumped quite often for a host of random reasons.

[Brock Landers]

make sure theres no oil tank/ remediation issues on the property. good luck!

[digitaldeath]

Really???

Does u have the cash?

[splat]

It's a fixer upper. Sounds like you only saw the exterior but you mentioned the roof. Only floods and meth labs can do more damage than a leaky roof. A new roof, some garden hose abatement, new paint and floors and it'll look all nice and be fine. Worst case possibilities are a consideration. Go crack a door and look around. Then you'll have a really good idea of what it's gonna take.

[LightRanger]

Buddy bought at place in Meyers at a BofA auction for... $120k, IIRC. 3 BR/2BA. In January 2012 or 2013. Fortunately he was able to get an idea of the interior from an old agent listing he found on redfin or something online. He ended up sinking another $60k into it. Great income property now, and obviously worth far more now than what he put into it. I think he said Zillow put it at like $395 or something. I bet it'd go for $450-500 now.