Sunday, August 26, 2012

Round Two

Back to the drawing board!  With 153 Howard rented, I have been looking for the next possible property purchase.  I've looked at a few houses here and there, but it seemed like the super cheap deals had dried up.  Good news for the housing industry, bad news for me.

All the potential houses that I saw were a) already snatched up, b) had serious structural issues that would be cost preventive to use for a profitable rental, c) were VERY costly to repair due to unbelievable lack of care to the house (think multiple dogs and cats left on the 2nd story of a house with no litter box/place for the dogs to go to the bathroom) or d) a combination of the before mentioned issues.

Finally one day when driving on the main drag of my humble little town, I passed THIS sign just across the street from 153.
You may be thinking, "she took a picture of the auction sign?"  Yes!  I did!  My daughter and I walked down to the house to check out the contact information, but couldn't possibly remember all the #s, so I took a picture to access later.

Property auctions have always fascinated me.  The house next door to my house was auctioned after the owner passed away and her family didn't want to wait for it to sell traditionally.  It was fun to watch and painful at the same time.  Painful only because it went for HALF of what I had purchased my house just 4 years prior and they were similar in size/style.  Guess I won't be moving anytime soon.  This auction was a county auction for tax foreclosures.

There were 4 houses and 1 piece of property being auctioned in my town, but over 50 in the county.  During the evening of the open house I went to see 3 of the houses, ruling #4 out by viewing from the street alone.  The first one, the one with the sign I originally saw, looked decent at first.  It appeared there was no basement - the location of many structural issues in old houses.  However on further inspection in fact a basement DID exist - a hidden door was found and the news in the basement was NOT pretty.  I brought a friend's husband along with me who is in the construction business - and his advice was "walk away".  On to property #2.  Property #2 looked scary from the pictures, but the good news was that it was an easy repair involving a small piece of roofing.  Mostly just cosmetic issues.  This property's starting bid was higher than the other 3 but overall it looked like a good option.  Finally, property #3 was pretty dumpy.  It could have some possibilities - but due to previous owners poor planning, 1 of the 3 bedrooms was changed into the furnace room.  Yes.  A bedroom was now the location of a furnace.  At the end of the day, I was really only interested in #2.

The weekend before the auction, I heard there was a 5th house being auctioned, listed as a local township vs. our city because it was just outside city limits.  I took the kids out for a drive and drove past this "new" house and each of the houses again.  This new house - a solid brick house -  looked decent, but without being inside, it was a risk I wasn't willing to take.  During the drive, I noticed the auction sign at house #2 was taken down and there was a roofing sign in the yard as if someone had hired a company to work on the roof.  I was TICKED!  The rules of the auction stated that while the county could remove a house at any time, houses would NOT be sold before the auction timeframe.  I had my assistant mom call the county while I was at work and thankfully the house was still on the auction block.

Mom and I went to the auction, agreeing upon our limit we were willing to spend on the house.  There were over 50 registered bidders in attendance.  I got nervous.  One of the first few houses that was up was the brick house just out of town.  Starting bid was $4400.  It sold for $22,000.  Still quite a deal - but I was surprised how many bids there were.  We sat for a bit as the house we were interested in was approximately 40th on the list.  They breezed through the list pretty quickly.  Some properties had only 1 bidder or none at all.

#1 came up first - the one I was advised to walk away from, and it sold for $3500 more than the opening bid.  #4 came up and only 1 bidder came forward, so it went at opening cost.  #2 - the one I wanted came up 3rd and I braced myself for a fight.  Surprisingly no other bidders stepped forward and the house was mine for the opening bid!  I was SHOCKED.  Lots of work to be done, but I got a steal of a deal!!

Next post.... BEFORE pictures.  Brace yourselves.  It's not pretty!

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