I was talking to an experienced investor, a “Professional Property Investor”, according to her card, who said that the problem with auctions is the cost of Due Diligence on number of lots to try and buy just one, unlike EA’s where you generally only incur costs after your offer is accepted, hammer down. Of course that ignores the over 30% of accepted offers that bomb.
But it does seem true because with each property you supposedly need/should have a survey, then a builder to estimate the cost of the work, then a solicitor to look at the legal pack then, and so it goes on, and then, at the auction, someone just keeps on bidding way past your maximum, in fact they bid more than you think the property is even worth, fixed! A Complete Lottery
Result you have wasted/lost hundreds of pounds on the surveys, legals etc and, if you carry on with this strategy, you could spend all your cash pot without buying even one property and all you will have to show for your cash are worthless surveys, valuations, builders estimates, legal opinions & pics & pages of Due Diligence, all mostly redundant.
All quite right, but but, what if I could show you how to reach the auction room door, on the day of the auction, without spending any money on surveys, valuations, building estimates & legal opinions.
As you know, early 2016, I am publishing Buying Auction Property, BAP, an 80,000 word Complete Guide to not spending money to reach the auction room.
All you will have paid for is viewing petrol/diesel, parking?, coffee, coffee & more coffee, plus some viewing tools, clipboard, ballpoint, digital camera, lazer measurer, flashlight, damp meter, carry-bag etc and maybe my hand-holding time, but only once not for every auction, unless you want me to carry on holding your hand because Buying Auction Property will be Free-To-Reader!
Auctions are the place to buy run down property that you can fix-up & flip for a profit or fix up, let & re-mortgage to, in both cases, release all your cash and repeat the strategy. The only question is how many do you want because between 2,500 to 3,000 residential properties are sold in the auction rooms every month. Through October you could have chosen from 2,196 properties and that ignores the nearly 600 unsold properties.
If you have a fear of auctions that stops you taking advantage of this cascade of potential BMV properties from highly motivated vendors please tell me about it and maybe I can allay your fear.