On one hand, the auction process was super successful.
- 2100 mailers to surrounding .5 mile radius generated a lot of calls to the toll-free 11 Day Sale Real Estate Hotline. Many visitors mentioned the cards.
- 90 Auction signs posted in 1mi radius. Amazing pull.
- Over 130 groups (most groups were 2 or more) attended on both days. Huge turnout.
- 9 bidders willing to put their info on a bid card & participate in the auction.
Unfortunately, I missed the market by about $100k! My best estimate (comps, sold's, property condition etc.) was that the property had a retail value of 460k+. I bought it at $387k on an option contract & moved forward with finding an end buyer.
Bids:
- $225k
- $250k
- $275k
- $300k
- $300k
- $325k (eventually moved up to $350k)
- Skipped first round; Joined at $350k in round 2, but wouldn't budge upwards...
- Backed out once he heard the $300k+ bids (but asked me to call him with a cherry deal next time...)
- All cash buyer. Wanted $.50 on the dollar (150k?) Hot REO investor.
AND, to add insult to injury, the dirt in Paso Robles is like CEMENT! Holy Crap! I had to use a piece of 3/8" rebar and a 3lb engineers' hammer to make holes for my signs. I think I pounded 140+ holes in the ground getting them all posted. (Having the holes already there made for easy replacement though...)
Education. Expensive, but priceless.
Lessons learned?:
- Know thy market. It is lower than thou thinkest...
- Buyeth Bettereth.
- Auction process works exceptionally well in this market. (assuming 1 & 2 are met)
- Ingenuity and persistance are key to success in real estate investing.
- God bless the option contract. I am greatful that the seller had no way to force me to buy this house at $387k. Option to purchase for 30 days... $11 dollar consideration. What a great way to control property.