Bidding to Buy: A Step-by-Step Guide to Investing in Real Estate Foreclosures

by David Osborn, Aaron Amuchastegui

Overview

Welcome to the world of buying foreclosed homes at auction—a real estate strategy that lets you remove the middleman, decrease your competition, and buy at a discount.

Bidding for properties on the courthouse steps while competing in real time with other investors is a thrilling experience. There’s nothing like it in the world of real estate, but there’s also a lot to learn. With dozens of insider auction secrets that are proven to help maximize returns, Bidding to Buy will show you the skills you need to successfully bid at auction, then turn a healthy profit on your investment.

Successfully buying foreclosures isn’t a matter of luck, and it isn’t for insiders only. However, it does require a process—one that can be repeated for optimal returns. In this book, you’ll find a full blueprint of the foreclosure process, including the repeatable five-step method that the authors have used to buy thousands of properties.

Discover a new kind of real estate investment and uncover profits on your local courthouse steps!

Inside, you’ll learn how to:

Find properties before they are broadly exposed to the market

Understand the entire foreclosure process and how it differs from state to state

Conduct complete title research and develop an eye for red flags

Navigate the potential risks and pitfalls behind a live auction

Access property listings and early posting data

Build an accurate financial analysis on any available property

Acquire creative and alternative financing methods, including no-cash solutions

Complete critical post-auction steps, such as evicting tenants

Product Details

ISBN-13:	9781947200333
Publisher:	BiggerPockets Publishing
Publication date:	09/08/2020
Pages:	250
Sales rank:	665,888
Product dimensions:	5.80(w) x 8.90(h) x 0.50(d)

About the Author

David Osborn is the New York Times bestselling author of Wealth Can’t Wait, Miracle Morning Millionaires, and Tribe of Millionaires. He has completed more than one thousand real estate deals over the course of 25 years, including single family, multifamily, development, and private equity investments. As a serial entrepreneur and the founder of more than fifty companies—including the 7th largest real estate company in the US, with more than $9 billion in sales in one year alone—David’s goal is to achieve success in life by helping others achieve success in life. He currently lives in Austin, Texas.

Aaron Amuchastegui is the CEO of Roddy's Foreclosure Listing Service, which trains thousands of people to buy houses on the courthouse steps. Since 2009, he has personally completed more than 1,500 deals, most of which started at live, courthouse-step foreclosure auctions and ended as fix-and-flips or rental properties. Aaron is also a co-host of the Real Estate Rockstars Podcast, an Ironman triathlete, and a world-traveler alongside his wife and children. He currently lives in Leander, Texas.

Table of Contents

Introduction Part I 12

Introduction Part II 15

Part I Fortune Favors the Prepared 22

Chapter 1 Risk and Reward 23

The Foreclosure Process 24

Opportunities in the Foreclosure Timeline 26

The Risks of Buying at Auction 28

The Rewards of Buying at Auction 31

The Risk-Reward Connection 33

Chapter 2 Tools of the Trade 35

Deacon versus Jasmine: Two Approaches to the Courthouse Steps 37

Fishing versus Hunting 38

Improving Your Numbers 39

The Tools of the Courthouse Warrior 40

Taking the Numbers Game to the Next Level 44

Chapter 3 Assembling Your Team 45

Time, Money, and Teleportation 46

Your Auction A-Team 47

Tips for Building a Great Team 51

Fishing and the Love of the Process 52

Wait! There Are Resources! 53

Part II The Five Steps 54

Chapter 4 Step 1: The List 55

It's Worth It 56

How to Build Your First Foreclosure List 58

Filtering Your List 66

Listin' Ain't Easy 68

Chapter 5 Step 2: The Drive-By 70

Start Up Your Best Risk-Management Tool 71

Your Drive-By Goals 72

The Drive-By Process 73

The Best Time for Your Drive-By 76

Drive-By versus Drop-In 76

What Do I Say? 77

Capturing Property Information 78

A Reminder: Drive-By information Keeps on Giving 80

There's No Substitute for a Drive-By 81

Find the Secret 83

Chapter 6 Step 3: Property Analysis 86

Property Analysis: The Big Picture 87

A Resale Price 88

1 Take a Bird's-Eye View 89

2 Look for Sales History and Comparable Properties 91

3 Adjust Your Comparables 95

Valuation Example 96

The Dangers of Square-Foot Pricing 97

B Costs 100

Consistent Line Items 100

Miscellaneous Overhead 101

Construction Costs 101

Back to the Bid Sheet 102

Help! 103

The Art of Analysis 105

Chapter 7 Step 4: Title Review 107

What Is Title? 108

Lien on Me 108

The Auction Difference 108

Three Ways to Do Title Review 109

The Task at Hand: Find and Prioritize Surviving Title Risks 112

A Check for Outstanding Property Taxes 113

B Find the L's: Liens, Lawsuits, and Liabilities 115

C Filter and Prioritize Your Findings 120

Which Loan Are You Buying? 121

Title Déjà Vu 123

Disclaimer: Go to the Pros 123

Title Research Pays Off 123

It's Time to Get Ready for Auction! 124

Chapter 8 Step 5: The Auction 125

The Foreclosure Auction Mindset 127

The Auction Experience 128

Solving the Paradox of Auction 131

Preparing for Auction 131

To Bid or Not to Bid 136

Onward to Part III 137

Part III Next Steps and Advanced Moves 138

Chapter 9 Behavioral Auctionomics 139

From Uncertain to Surreal 140

Tilt! 141

1 Have the Right Goal 142

2 Know Your Bid in Advance 142

3 Arrive Early and Prepared 143

4 Listen Carefully 143

5 Don't Bid on Unknown or Discarded Properties 144

6 Bring a Voice of Reason 145

7 Accept Going Home Empty-Handed 145

8 Trust Yourself and the Process 146

9 Don't Worry About Bidding Style 146

Money, Money, Everywhere 147

Sold! To the Person with the Foreclosure Book! 147

Chapter 10 Now What? 148

Check the Receipt 148

Head to the Property 149

Next Steps for Vacant Properties 149

Next Steps for Occupied Properties 153

Eviction 156

The Night of the Auction: Partner Update 158

A Week (or So) Later: Title Recording 158

Disclose, Disclose, Disclose 159

The Elephant in the Room 159

Chapter 11 Money 161

The Cash Barrier 162

Broke and Buying at Auction 162

The Reality of Foreclosure Finance 164

Two Degrees of Kevin Bacon 164

1 Finding Potential Investors 164

2 Selling Your Plan 165

Creating a Financial Arrangement 167

Aligned Incentives 169

The Trick to Auction Money: Just Start 169

Chapter 12 Your First Courthouse Step 171

The Other Upside 172

Acknowledgments 175

What People are Saying About This

From the Publisher

PRAISE FOR DAVID OSBORN’S BOOKS

“When it comes to all the tools that David and Paul deliver as they play to win on the road to financial freedom, ‘abundance’ may be an understatement. Their passion for entrepreneurship and commitment to supporting their global community add depth to their success strategies for ‘life at the top’ and the messages of inspiration in Wealth Can’t Wait.”
—Robert Kiyosaki, Entrepreneur, educator, and author of Rich Dad Poor Dad

“Osborn and Morris offer their approach to building a successful business and building wealth. There is a lot of information packed into the book, and yet it remains an engaging and accessible read.”
—Caroline Ceniza-Levine, Senior Contributor at Forbes.com

"If you’ve struggled to make change, or it seems like you’ve done everything right and something still seems wrong, my bet is that you’re disconnected from the fundamental truth that who you surround yourself with determines your future. Your opportunity to rediscover that truth—and change your life—lies in this remarkable story."
—Hal Elrod, Author of the New York Times bestseller The Miracle Morning and The Miracle Equation

“A wonderful story and a compelling guide to why surrounding yourself with the right people is so important to success.”
—Jeff Hoffman, Serial entrepreneur and co-founder of Priceline.com

PRAISE FOR AARON AMUCHASTEGUI’S BOOKS

“The 5-Hour School Week is the guide that will show you how to identify the best educational model for your family. Highly recommended.”
—Hal Elrod, International Best-Selling Author of The Miracle Morning

“Homeschooling provides an unrivaled opportunity to develop a growth mindset for our kids, and The 5-Hour School Week is a great example of that very reality. Aaron and Kaleena have put together a must-read manifesto for any family, whether you homeschool now or are thinking of it for the future.”
—Matt Beaudreau, Founder of Acton Roseville and Keynote Speaker

“Allow this book to bring you encouragement, inspiration, and some practical how-tos. As a homeschooler myself, I'm walking away from reading this book with a fresh perspective on our journey and can't wait to start implementing our own 5-hour school week!”
—Lindsay McCarthy, Coauthor of The Miracle Morning for Parents and Families
—Mike McCarthy, Coauthor of The Miracle Morning for Parents and Families, and CEO of Gobundance and Fambundance

“The 5-Hour School Week focuses on the most important lessons and implements them by following the child—an art most of society has lost.”
—Jim Sheils, Best-Selling Author of The Family Board Meeting, Cocreator of the Education Matrix and the 18 Summers Movement
—Jamie Sheils, Leading Alternative Educator and Family Life Mentor, Cocreator of the Education Matrix and the 18 Summers Movement