Once you’ve found your local auction and obtained the sales list, it’s time to get to work. Managing your list will involve a degree of personal preference so there will be some decisions you need to make. No matter what you’re looking for, you’ll need to efficiently sort your list so you don’t waste time driving to properties needlessly. To get started, you’ll need to ask yourself 3 basic questions to create an avatar for the type of properties you will be bidding on.
Three Easy Questions to Ask Yourself
• What is my ultimate budget?
You don’t want to start off looking at million dollar properties if your budget is $10k. Automatically remove any properties where the opening bid is above your budget. Alternatively, you could put the higher priced properties into a separate list to look at later. That way you can go out and try to find funding for them if you get extra time before the auction.
• Do I want to invest in a vacant lot?
Vacant land can be a great place to start if you’re budget is low but it’s not for everyone. When you’re looking at bare land, it’s the hardest to leverage and can take longer to sell than a house. You will also end up doing additional due diligence on vacant land. If this doesn’t interest you, take it off your list and remove these parcels from your list.
Depending on your list source, these properties will look different. Sometimes they are labeled as a “vacant lot” like you would see on Bid 4 Assets from Los Angeles County. In Grant Street Group software like San Bernardino County, the spreadsheet will be empty under the “improvements” column. Aside from those very obvious clues, another give away is a parcel with an incomplete address.
• Should I invest in properties that are geographically far away?
If you don’t want to commute regularly or manage a remote team, you’ll want to stay within specific geographic limits. San Bernardino County for example, is spread across 20,105 square miles and the adjacent Riverside County is 7,303 square miles. Purchasing a property on the Northwest end of San Bernardino County and the Southeast side of Riverside would make for a very daunting management task. For comparison, there are 9 states that are smaller than San Bernardino County and Harris County in Texas where we do most of our live auction trips is only 1,777 square miles. Unless you’re in California, you won’t likely have this large of a spread.
The fastest way to limit your search is to sort the list by city and go from there. You’ll be able to quickly spot the cities that lie within a distance you’re comfortable driving and break them off into a smaller and more manageable list.
Thank you so much again for reading and for being a part of the TAI Community!