My Latest Auction

As you may remember, I held an auction/open bid sale the weekend of Nov 8-9.
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.

Like I said, the PROCESS worked like a charm to get people there. This is why I favor these type of sales to sell properties.

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:

1. $225k
2. $250k
3. $275k
4. $300k
5. $300k
6. $325k (eventually moved up to $350k)
7. Skipped first round; Joined at $350k in round 2, but wouldn't budge upwards...
8. Backed out once he heard the $300k+ bids (but asked me to call him with a cherry deal next time...)
9. All cash buyer. Wanted $.50 on the dollar (150k?) Hot REO investor.
   

Highest bids were $350 & $350. bummer. Taylor makes $0.00. Referred the deal to my realtor and she might make something out of the short-sale as the property is leveraged at $380k.

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?:

1. Know thy market. It is lower than thou thinkest...
2. Buyeth Bettereth.
   
3. Auction process works exceptionally well in this market. (assuming 1 & 2 are met)
4. Ingenuity and persistance are key to success in real estate investing.
5. 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.