You can learn how to buy a house at an auction with confidence. Going to a real estate auction can be intimidating, especially if it’s your first one, which is why you should go in prepared.
How should you approach this type of event? What do you need to know to be successful? Before investing in real estate property, you must ensure you have the correct information about the auction and the properties being sold, enough money available when required, and an exit strategy.
Table of Contents:
- Observe How Auctions Work
- Know What You Want Before Buying at Auction
- Learn More About Cheap Property Auctions
- Read the Video Transcript
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Observe How Auctions Work
If you are heading into your first auction for real estate, it’s a good idea to practice beforehand. Practice does make perfect! Don’t attend an auction to invest; attend your first dozen auctions to see how things operate and learn.
Go to auctions, observe your surroundings, and feel how they operate the business. Sit back and watch what takes place, see how people react and get a sense of what you can expect when you start investing in real estate yourself.
80% of people at an auction will do little to nothing and just sit back and not participate. But the other 20% are the people raising their hands, buying property, and bidding for the chance to return their profit.
You’ll get there, but start slow and be observant. You won’t learn how to buy a house at an auction overnight.
Know What You Want Before Buying at Auction
We mean to make sure you know how to buy a house at an auction, how much you want to invest and how much you are willing to bid.
The key to a successful investment strategy is buying low and selling low. Take your time, practice, and know what you want before deciding.
Learn More About Cheap Property Auctions
In conclusion, learning how to buy a house at an auction takes research and practice. Don’t just jump right in and risk making expensive mistakes. Get educated. Learn the rules, observe several auctions, know what you’re buying before you bid, and always have an exit strategy.
We are here to help; we have been training like-minded individuals such as yourself, who are eager to get into the investment business for over 25 years. Learn how to buy a house at an auction. Click here to get started today!
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Read the Video Transcript:
How to Buy a House at an Auction
Randy: You may have heard that investing in a tax deed and getting a house at auction is a great way to pick up some property for a small price. You can turn it into a big investment, a big win there. But there are some things that maybe you need to know about the auctions process itself. Well, this is good, because we’re talking to Ted Thomas right here, and Ted is pretty much the authority on tax liens and tax deeds, and then auctions and such.
Randy (cont’d): So, Ted, could you fill us in? I mean, I’m thinking about, I want to do this. Maybe I see a property in the paper. You’ve shown us how to find them. And what happens when I go to this auction? What should I expect? If I want to know how to buy a house at an auction, how do I do this?
Ted: Well, I would tell people, to start out, if you’re going to go to auctions, why not practice a little bit? You know, that kind of works out.
Randy: All right.
Ted: You don’t learn to be a great piano or trumpet player or anything else without practice, and that includes learning how to buy a house at an auction. So you can go to as many auctions as you want and watch what they do, so you’re not terrified by the auctioneer or what’s going on in the room. I can tell you this, if you show up at some auction, there might be 400 people there, but basically it’s 80-20. 80% aren’t doing anything, 20% are doing everything.
Ted (cont’d): All right, so the auctions take place, they’re live. You can go in the room, you can sit there and watch, you can sit in the back and watch the give-and-take of the room, how people do things. You’ll always find a certain amount of people that are really aggressive. Then you’ll find other people that are timid. Then you’ll find 80% don’t know what the heck they’re doing.
Ted (cont’d): There are people that will come to the auction not knowing what they’re doing, and they’ll pay retail price. Yeah, that’s right. They don’t know what they’re doing. They’re just thinking of buying at an auction. So you want to practice on paper before you go so that you know what you’re going to spend.
Ted (cont’d): Now, I just happen to have a white shirt on today, so if I had a white shirt on, I would, before I left for the auction, I probably would have written with my pen on my shirt the maximum I’m going to spend, okay? I carry a sheet of paper to do that, but you’re getting the idea. You don’t want to get involved in that auction, because, wow, this is going to suck you right up to the top, which is what the auctioneer’s trying to do.
Ted (cont’d): So we know we’re going to buy at 10, 20, 30 cents on the dollar. And why do we know that? Because this is a business for us. I’m teaching you a business, and the business is simply this. I just want you to copy Walmart, Costco, and Target. They have a very simple business plan. Buy it low, sell it low. Buy it low, sell it low. So if you can buy for 20 or 30 cents on the dollar, don’t try to sell it at market.
Ted (cont’d): Sell it at something where you make a nice profit. Now, that means, before you go to the auction, you have already figured out, “This is my maximum bid, because I know I can sell it tomorrow afternoon for that.” Now, let me give you an example of that. It’s really simple, and if you keep it simple, you’ll be successful.
Ted (cont’d): For a $100,000 property, all those fixer-upper guys out there will give you $50,000 or $60,000 for that tomorrow. Why? Because they’re going to go in and fix the floors, and fix the windows, and paint it, and fix the roof, and they’ve got to do all that. They love to do that. They call them flippers, fix the property up. That was what your uncle taught you or your dad taught you.
Ted (cont’d): Forget about that. We want to buy it low, and then sell it low. So if we spend 30 cents on the dollar, sell it for 50 cents. It will sell quickly. How do you sell it? It’s not difficult. Think of all the electronic ways we could do that. Could we put it on eBay? Craigslist? Could we put it on any one of the electronic sites? Could we put it on Trulia? You could just go on and on. You could put it on the multiple listing service.
Ted (cont’d): You put it all those places and say, “I’ve got a $100,000 property, I’ll sell it for $50,000.” Your email’s going to explode. Why? Because all the fixer-upper people are looking for property. I just want to buy them and then I want to resell them. So we can practice all that before we go to the auction.
Ted (cont’d): Now, when you go there, some people start inching the price up. You don’t want to do that. Why? Because there will be another auction, which I can guarantee you. This year, in the United States, they will have 5,000 auctions. You only have to make your money at one or two of them. There’s no hurry. There are plenty. This is a business of abundance, and the rest of the world doesn’t know about it.
Ted (cont’d): If you don’t believe it, go to tedthomas.com, and you’ll see, one after another, people tell you, “I made $25,000,” “I made $28,000,” “I made $50,000.” These are just average people. They’re not spending hours doing it. But let’s go back to how to buy a house at an auction. Long answer to that question, go to the auction multiple times. Every time there’s an auction, show up, watch what happens. After you’ve done that 10 times, you’re ready to go, and you can do them online.
Randy: That’s really neat, Ted. And you know what? What you said this time around, and we we’ve been talking all day today in a bunch of great videos that you can see here, a lot of great informational videos, but your point about “Buy low, sell low,” you know, normally the whole saying in investing and stuff is you want to buy low, sell high, buy low, sell high.
Randy (cont’d): You’re saying, “No, no, you can do it quicker,” and that’s kind of interesting, and that’s a remarkable sort of viewpoint here. So check out some of our other videos. We’ve had a lot of great subjects we’ve been talking about today, and they’re all waiting there for you, tedthomas.com, check it out right now.
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Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.