The Way to Buy Foreclosures is NOT Through Auctions

If you're a beginner or even an experienced investor, you should NOT buy apartment buildings or hotels through auctions.

Why?

Three reasons:

You need cash, lots of it - sometimes, it's all required upfront - or you need to close in 30 days or less. I syndicate my deals so I need 60 days to raise all the money from private investors.
You have 30 days or less to do your due diligence and in some cases, this is not enough time, especially for the bigger apartments (100 units or larger) and hotels. Sometimes getting an inspector, or contractors to give you the renovation or capex estimate - takes 2 to 3 weeks. Worse, some auctions don't give you an inspection contingency, so you buy "as is". That's not good for a newbie to do.
Lastly, you are competing or BIDDING against other investors who are more experienced or better capitalized than you. Guess who wins?

Having said that, there are other ways to buy foreclosures that don't involve bidding at auctions.

Who wants to know these other ways? Let me know in the Comments below and I will tag you when my next post about this comes out.

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