Buying Homes at Auction VS Buying Notes

Learn to Purchase Home Prior to Auction

Traditionally, when an investor wants to purchase a foreclosed home they would typically go to the courthouse where homes and assets are auctioned off at discounted prices. Is buying homes at an auction the best method in obtaining an investment property, and more importantly what is the best way to use your resources when it comes to buying homes at auction vs the note?

The all-out craze in buying homes at auction has dramatically decreased since the height of the 2008 residential mortgage crash. The main reason(s), competition from newer buyers and less inventory. Since the foreclosure moratorium of 2010, foreclosures were halted by many lenders so that a less expensive route could be sought after, loan modification. We would recommend learning to purchase the home prior to going up for auction. You can purchase the same piece of real estate for roughly 30-40% cheaper than at auction. By purchasing the actual mortgage note from the foreclosing bank, you could save yourself thousands of dollars by learning to acquire the actual debt vs. the property itself.

Buying Homes at Auction

Buying homes at auction can typically turn a seemingly “smart” investment into a nightmare. How may an investor know the interior condition of the home, prior to auction? He can’t, he must wait until the offer is placed and the bid is accepted to take ownership of the property to eventually get inside. You must fully understand the scope of work the property will need to bring to market, to sell quickly. Therefore, we recommend learning how to buy the same property at auction well before it’s listed.

For example, instead of purchasing a $100k property for $90k at auction, you could learn to purchase the same house for $55-60K buying notes.

Buying Notes

Purchasing a distressed mortgage note enables the investors (like yourself) to purchase homes for a fraction of the price you would at auction, and getting it before it heads to auction. This gives you a greater return on investment with less room for error. Buying notes give steeper discounts and usually provide larger profit margins.  Our sales team has national portfolios ready so you can take the guesswork out of purchasing real estate at auctions, and start buying notes and purchase custom-tailored distressed real estate tapes. Our management team and sales floor are standing by. Please contact us to see what options are available to you.