I’ve been writing lately about the surge in “flipping” houses (buying, fixing and selling for quick profits). Investors are seeing success in all segments of the buying market (pre-foreclosures, short sales, and REOs). Now we are seeing a surge in flipping at the auctions too. Here’s why trustee sale (or sheriff sale) auctions are the apple of the eye of many investors right now….
It’s no surprise that banks are desperate, but did you know they are lowering minimum bids at the auctions to unload properties before they become REO? Savvy investors are making huge profits buying at the sales all over the country. Here’s a great example, taken from the Sonoma Press Democrat in California. One of the many counties that is seeing a surge in auction buying.
Check this out and then JOIN ME Wednesday December 14th with Master Auction Investor Sarah Garlick, who will be sharing her Secrets to Successful Trustee Sale Auction Investing with my clients. Don’t Miss this Limited-Time Live Webinar Event! More Here.
Flipping foreclosed houses
Sonoma County real estate crisis proves lucrative for investors who buy distressed homes at auction, resell for sizeable profit
Flipping homes, where an investor buys a house, makes some improvements, and then quickly resells it for a big gain, might seem like a relic of the real estate boom. But it has again become big business.
Real estate investors are buying homes at foreclosure auctions from banks and then reselling the properties within months or even weeks for large gains — often reaping bigger profits than speculators enjoyed during the heyday of the real estate run-up in the first half of the decade.
The lucrative business has attracted local players such as Hank Trione, a member of one of the county’s wealthiest families, and Chris Peterson, a prominent home builder who teamed up with investors to launch a house flipping operation in 2009 that now spans Northern California.
The financial returns can be eye-popping. One investor purchased a Santa Rosa home at auction for $153,575 and sold it 30 days later for $330,000 — a 115 percent markup.
Those payoffs have allowed a handful of investors to generate tens of millions of dollars in profits, according to a Press Democrat analysis of the nearly 700 Sonoma County homes sold to investors at auctions between January 2008 and last October.
About 1 one in every 10 homes foreclosed in Sonoma County was sold at auction to a third-party investor such as Peterson, according to foreclosure records provided by MDA DataQuick of San Diego.
The Press Democrat conducted an analysis of all 6,463 properties that went to auction in the county between January 2008 and October of this year. Nearly 700 were sold to third-party investors, and the rest were seized by lenders.
Investors on average paid $236,000 for homes sold at auctions, and were able to resell the properties about three months later for an average of $330,000 — a markup of $94,000 or 40 percent….
Auction buyers point to the benefits of their work, including rehabbing dilapidated homes, employing construction workers who lost jobs when the housing market tanked, and helping the real estate market begin to recover by finding new owners for the glut of foreclosed homes.
Peterson said that in his 30-year career as a real estate professional he had never seen a better opportunity to buy properties so cheaply and quickly resell them for so much more. “I firmly believe that this is the opportunity of a lifetime for real estate investors,” he said.
And this is just one county… there are thousands throughout the country that are seeing these kinds of deals every day. But auction buying is a high reward, high risk venture. You MUST be completely prepared before you bid on a single property. And you need to have access to cash to play and a great system to track all these upcoming auctions. We can help you…
Find out how you can find and work with outside money partners to help fund your auction bids and how to protect you and your investors money, by doing the proper due diligence before you bid — Wednesday December 14th, 6pm Pacific in our Exclusive Professional Investors Webinar “Trustee Sale Auction Investing for 2012” by Master Auction Investor Coach Sarah Garlick. You must register in advance to secure your spot.