CRR Blog

Is it "SAFE" to bid on a 2nd at the auction? It can be.... Here is an example....

4BR/3BA Home on La Cima Dr in La Mirada sold at auction 11 days ago.

The 2nd loan was foreclosing.

The loans were:

1st TD    $232,000.00 11/28/2000

2nd TD *$191,000.00   9/22/2010

The bidder who bought this home paid $192,897.00 to pay off the 2nd TD.

Now, you may ask.. "What about the 1st TD?"  Good question.

Our website shows that the 1st TD has also started a foreclosure.

The notice of sale indicates that the 1st TD is owed $249,952.00 and that there is a sale date on 4/6/2015.

This buyer had two options.  They could have done what they did. Or... They could have waited until April and bid on the 1st TD, knowing the 2nd would get wiped out at that auction, and hope that no other bidder drove it up or that no one else had showed up at the auction 11 days ago and did what they did...  As it is, they paid $192,897.00 at auction, and must now bring the 1st that is owed $249,952.00 current.  That is a total purchase price of $442,849.00.  The house has a value of $545,715.00 So that means the buyer has over $100k in equity. 

The buyer here played the safe bet.  They bid on a 2nd TD, having full knowledge what was owed on the 1st.  They bid on a 2nd, knowing many people do not do that, thus limiting their competition at auction by doing the unconventional thing- bidding on a 2nd.  By not waiting to bid on the 1st at auction, they got the house. They saved $100,000 and prevented a potential bidding war in April, because now that auction will not happen.

We always have choices.  What choices we have are dictated by the numbers, the property, and the turn of events.  It is our focus to define these choices and do the best we can.  Call CRR when you have a choice to make.  We will help. 

You can do the impossible... if you just stop telling yourself it's impossible....

I commonly tell clients not to be afraid of the opportunities in front of them.  They ask if it is really possible to get a great deal when there are so many people out there who can bid against them...  My response is somewhat over-used, but I like it.  I liken this process of researching and buying property to golf.  You have to overcome your own objections to success if you are ever going to put the ball on the green!

On Monday of this week, an investor bought a home in Rancho Palos Verdes at auction and saved 50%!  He/She purchased a 3BR/2BA on Via Frascati for $567,000.  The house is worth as much as $1,123,562.  The bidding started at $378,252.60.  There were at least two bidders.  But someone always has more to spend than the other person.  So in this case, the winner simply had a little more and so they got the deal.

They got their cash together and they bid.  They had enough to win so they won.  It is that simple.  No worries.  As long as you do your homework and are ready to bid, you will either win or you will be outbid.  If the latter happens you simply wait for the next opportunity.   If you want another analogy that fits....  There are plenty of fish in the sea.  You just want to make yourself available and put your hook in the water.  There will be fish that get away.  But it the one you catch that matters.

Get out there and don't worry about the what-ifs.... Just do your research and ask questions based on facts. 

You will do this!

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