It turns out the bank decided to put it up for auction. It was originally listed at $129,900, and then reduced to $99,900.
Having never gone to a an auction - period - I wasn't sure what to expect. I got there about 7:25pm and met up with the other investor. The auction started around 7:30-7:35pm. I was only there for about 30 mins, but in that short amount of time (minus 5-6 minutes for a person to explain the terms and conditions of the auction), the auctioneer managed to move NINE properties. When I left at around 8:00pm, there were still 5-6 properties left, but I had seen enough.
The 4-plex was the 5th property to be auctioned. I thought at best the place was worth around $75-80k, since each unit needed at least $5k of work EACH. It ended up going for $86k.
There were other properties in various shapes, locations, types that went for a lot less than I thought they were worth. One in particular was a 2,754sf, 4/2.5, SFR in a nice area and in pretty good shape from what I could tell that went for $102,500. Tax records show it was assessed this year at $162k, so that winner got a good deal. The nice thing about these types of auctions (unlike tax sales) is that the winner has 30 days to pay the balance. The minimum amount they had to pay at the time of the sale was $2,500 or 10% - whichever was greater.
Definately some good bargains to be had at these auctions.
4 comments:
Brian - The problem with this area is that the market has still not recovered from the dot-com bust. However, I think right now is the best time to buy. From a post you made recently on your blog, I think this area is in the "pre-pre-boom" phase. Meaning, now is the time to buy before other investors start flooding the market because prices are going to rise. Of course this is all just my opinion.
Richard - Unlike with tax sales, with this particular auction you get clear title (i.e., Warranty Deed) when you purchase the property. Not sure if that means ALL liens/encubrances are cleared or just those junior to the lender on the mortgage. It's still a good idea to add that in your due diligence beforehand. Other than that, the only 'pitfall' I see is coming up with the 10% (or $2,500) down right then and there.
Brian -
Damn, I wish my real estate was priced that low!
And still nothing compared to the prices Trisha is spending on her acquisitions. :-)
Brian -
Travis County is where the largest amount of homes exist in this area. It's also where the city of Austin and the University of Texas reside. I know several investors who concentrate only on those areas, and it appears to be a good place. I concentrate more north in Williamson county - specifically, the cities of Round Rock, Hutto, and Taylor. I'll look at houses in Goergetown, Pflugerville, Cedar Park, and Leander, but that's what I consider "out of my area". About 10 years ago, Round Rock was considered a quiet suburbia of the greater Austin metro, but it has boomed in the last decade. Hutto is now like Round Rock used to be, but it is starting to draw some businesses (primarily retail). Unfortunately (or fortunately?) both Round Rock and Hutto are flooded with relatively new homes (i.e., <8 years), so most don't have exceptional equity. There are definately diamonds in the rough, though.
What I find most interesting is that while Round Rock is dotted with multi-family properties (x-plexes and apartments), Hutto has zippo, nada, nothing as far as that goes. I think this is actually an opportunity waiting to happen. There is a lot of farm land in and around Hutto that could be developed for this purpose. I think the feeling, though, is that the area isn't large enough yet to support multi-family properties. Again, IMHO, it will.
I'm glad to see you're looking at both short and long-term opportunities! That multiple family Hutto idea sounds like a marvelous long-term plan. And, if I were you, I'd be going to every auction in your area! Here, so many investors go to those things, it's almost impossible to get a good deal.
I can also tell you why prices are so low in my area. It's because nobody wants to move here! We lost a disproportionate number of good paying jobs during the recession, and have yet to recover. Lots of people moved away. But, it won't always be this way. :-)
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