Best Way To Attract Buyers To A Foreclosure Auction
A partner and I recently bought a "Note & Mortgage" from a bank on a Tri-Plex in Albuquerque, NM. The property was in the Foreclosure process when we bought the "Note & Mortgage" so we have had to complete the process so that we can get the deed to the property. The property is currently vacant and needs about $5,000 of fixup costs before it can be rented. The property after being repaired will be worth approximately $118,000. The full amount now due on the "Note & Mortgage" including, late charges, lawyer's fee, etc. is $117,231.
The "Special Masters Sale" ( The one on the courthouse steps to sell the property) is going to happen June 30, 2004 at 11:00am.
When we were first considering buying the “Note & Mortgage” the amount of the default judgment already stated in the court was a lot less. One of our several "Exit Strategies" was to set the amount of the opening bid a little lower than was actually owed on the “Note & Mortgage” to attract Investors to purchase it at the courthouse steps. The first lawyer that we spoke with said that we could NOT do that. The reason was that we had to go with the amount that had been used in the previous documents filed with the court. (Approximately $107,000 at that time.) Our current lawyer who is actually handling the case has just informed us that YES we can place an "Opening Bid" wherever we want to.
We have chosen to set the "Opening Bid" at $88,000 to leave enough profit to attract investors and others who may be interested in the property.
So, My Question is: What is the BEST way to inform and attract investors to the sale which is now just a week away?
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We paid a LOT LESS than $88,000. Why do you think we set the opening bid at $88,000? So that it will be a "WIN_WIN" situation for both us and whoever buys the note at anythhing above $88,000.
The property is NOT upside down, but there isn't much incentive for anyone to pay the $117,000 that the note is worth and then have to put $5,000 in repairs and then have to let the Positive cash flow and appreciation accumulate for a couple of years in order to make any profit. Your question of "Why would anyone bid on this? is actually the reason why we agreed to "discount" the note essentially in order to provide a reason and Profit for someone to take advantage of.
Thanks for the two suggestions. I hadn't thought of either one.
First off, What happened to the message that I responded to. The second post doesn't seem to make much sense when the post with the question in it is no longer there.
Please now, my time is running out, I could really use some good Ideas about how to attract buyers to the Foreclosure Auction. I've only got about 3-4 days to accomplish this and it sure would be helpfull to get some CREATIVE ideas.
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I think a classified ad in the local paper saying something like the following:
AUCTION:
1555 Smith Ave
Opening Bid $88k
10AM January 27 @
Cook county sheriff's office
call 222-2222 for more info[ Edited by myfrogger on Date 06/27/2004 ]
Thank-You! That sounds like a GOOD idea.
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The log says that this post has been viewed 204 Times and there is only ONE suggestion.
Maybe we should name this website the "UN-Creative" Investors Website.
Please give me your suggestions. I only have One day left before the Foreclosure Sale.
Any and all suggestions will be GREATLY appreciated.
:-(
I am guessing that the scope of your question is beyond 95% of the people on this site. I do think that a classified ad would be the best way to attract investors to bid at the sale. You may also consider a sign at the property, although I do not think that you have enough time for that to be effective.
Good Day to you:
This idea won't help you tomorrow, but since you are computer savy maybe build yourself a website and put up a sign. Give them a virtual tour of the property online which will save them time as well as create some interest. Oh ya, run that add it the newspaper, or perhaps, advertise it the same way you found out about it.
Good Luck and make $$$
Tom
How did things go??
Thanks for your input. We did run some newspaper ads in 4 different cities. It did generate some interest, about 8 phone calls (Some of which were after the foreclosure sale) and one person showed up at the sale but did NOT bid so we were the high bidder. We will recieve the deed tomorrow.
So now we'll start to market it for possible sale to an investor, and start to fix it up at the same time. If we get it fixed up and rented out before we sell it to an investor, we'll probably keep it long term for the cash flow and depreciation. If we find a buyer before that time, we'll move our profit into another investment.
PS: Sorry it has taken a while to respond to this but I've been out of town on vacation for a week or so.
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