What to look for in a broker when buying investment property

[agentpeter]

Do the auction sales require you to pay 100% cash? I have never attended a foreclosure sale and just wondering how it all works.

-Peter

[BuyHawkeye]

Peter:

Yes, 100% cash. You get about 5 minutes to come up with the funds (in case you were going to ask ). We show up with cashiers checks for various amounts, then mix and match until we get close.

I just finished our list for tomorrow. As I stated in a previous post on this thread, it is just a number for us. It is a hard concept for new investors to grasp. There is so much emotion in real estate that it is difficult to let go of certain notions. We still wrestle with it from time-to-time when doing our final "drive-by" of the properties prior to auction. That is the last opportunity to assign a repair value and the temptation is often to write down "DIE, DIE, DIE" rather than an actual figure. Actually, my favorite comment for this month was "Strike, strike it to hell!" I then called up my guy and got an actual repair value. Still, it amused...

Back to the number thing. At the moment, I have 31 properties on my list that I have never seen (I don't do the driving anymore). We will be lucky to get two of them. Which two? I have no idea and I don't really care.

I ran title on 50 properties today my brain is mush. Sorry if I rambled on...

[BuyHawkeye]

Peter:

I forgot to mention. I see you are from Oregon. Each state is different. Georgia is known as a non-judicial foreclosure state. It is important to know that your rules will be different.

[agentpeter]

Maybe we should split this thread off.....

Anyhow.... Another question. It sounds like you determine how much to bid based off the title report, location/area, and property stats? You have to know what you're doing to buy "unseen".

[BuyHawkeye]

I don't know... Maybe something can be taken away from this and used to pick out a broker who knows about investment properties

To be sure, those are some of the critical elements included in the formula. Believe me when I say that it is just a number. Literally, we have a formula that takes variable inputs and then produces a number. I would suggest adding "Repair" and "Overhead" to your list.

The interior is unseen (about 95% of the time, at least). That is the benefit of being an investor who buys post-foreclosure. You get to kick the tires. We don't have that luxury.

I have seen pretty much the worst there is to see. After auction, it takes a round of beer to steel up the nerve to look at our latest acquisition. Maybe this coming Halloween I'll post my worst to put everyone in the mood...