Buying houses at auction is an adrenaline-packed activity that reminds me of skydiving. If you’ve ever bought houses at auction, then you know that if you don’t get inside, you can freefall to your financial death.
Not this time.
Recently, we acquired the property at 220 Benefield Court in Stockbridge, Georgia. Prior to the auction, I knocked on the door, spoke with the occupant, and I was able to see inside the house.
I could see it was well taken care of; in fact, I was actually shocked to see how well it was being taken care of by the current occupant. Once we acquired it, we had to evict the occupants, as they became uncooperative and wouldn’t let us see the house. Thus, we were shocked at the limited amount of rehab we will have to do.
In this business I tell people they have to be lucky. The truth is, you have to make your luck, and you do that by being prepared for opportunities.
How I buy houses at auction
Prior to auctions, I personally look at every house, estimate rehabs, rents, selling price and evaluate the area, in less than 10 minutes per house. This is not an easy task, as I drive up to 3,000 miles in one week and potentially get in and out of my car 100+ times per day.
If you want to buy at auction, you must know your local rules, do your due diligence and know your exit plan.
We paid $205,000 and we are putting less than $12,000 into this property. We will paint various rooms, paint exterior trim and all soffits and replace bad wood around the chimney. We power-washed the house and deck and then resealed the deck, did the landscaping and replaced seven windows with broken seals.
The house on Benefield Court would not make sense as a rental to me. It would rent for $2,000 and I will have $216,000 into the house once rehab is complete. This is a desirable area and resales do well here. I have plenty of room to negotiate as we test the retail market at $349,900.
As I write this, I am supervising auctions in six counties. I looked at houses for this auction, and so far, we bought three, hoping to get four. It’s not really easy. But it is time-consuming, and it doesn’t hurt that I have various exit plans:
- Keep and rent
- Wholesale as-is
- Rehab and sell to investor
- Rehab and sell to end user
What would you have done with this house? Take a look at the video and let me know.
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