Real estate General topic

[JJT]

Had an intresting call from a coworker today. He's looking for a way to house his mom, can't add another home to his property, hes got a 2nd property with home, but its rented out to a good, long term tenant. He found a home and property up for auction.

Here's the catch, no interior pictures, no inspection period, no walk through. Its 100% site unseen on the interior. Starting bid is Low, for 1 acre and a site built home, but no idea where it will go.

My advice was, you Have to bid as a total gut, or maybe bid as hoe and dumpsters. Property should be worth about $30-40k, without the home. Potentially worth less with the home. My advice was, if your actually interested, throw $16k at it, and dont raise. He said he was thinking $20k.

Anyone ever seen a home auction of this type, not able to even seen the interior?

He said he was going to look from road, take some zoomed in pictures. I mentioned, you can't tell the roof is "good", but you might be able to tell it "bad". You can see if the windows are all broken in, door, siding/stucco (not sure which it has).

The other catch, bidding closes at end of the day Friday, and you have to close by end of the day Monday....

I told him, maybe meth house, hoarder, dead body, or open roof and massive mold. None of those are insurmountable, if you get it right, but if its a total loss, even at $20k, figure $5k in demo, and the real risk is the time your out your money, but you should worst case be break even, and not out anything but time

We had a similar situation here, I bid what the land was worth. Figure worst case scenario - complete tear down.

 

[paulsharvey]

The coworker told me the auctioned home/land ended up at $135k. I told him, they probably plan about $65k in work, and resell for $250-300k.

He did some research the the auction outfit; and apparently they require take 10% deposit on any high bid, and then hold the deposit for upto 6 months. Not winning bids, just any high bid at the time of the bid.... Thats shady at best with minor items, but if your at $120k, high bid, before getting raised, and they hold $12k for upto 6 months, thats a big deal.

 

[WinterDeere]

The coworker told me the auctioned home/land ended up at $135k. I told him, they probably plan about $65k in work, and resell for $250-300k.

Who pays the auctioneer in real-estate auctions? 10% of $135k ain't nothing, when planned profit margin is only $50k - $100k, especially considering any work "planned" at $65k might really cost $90k... the way things tend to go.

 

[paulsharvey]

Who pays the auctioneer in real-estate auctions? 10% of $135k ain't nothing, when planned profit margin is only $50k - $100k, especially considering any work "planned" at $65k might really cost $90k... the way things tend to go.

I wasnt bidding, so, I dont know if its on both sides like most auctions, on seller, or on buyer.

I did point out to coworker, your going up against amateur "flippers", as well as professionals, and the amateurs Often under estimate the cost of hiring in the required repairs, or plan on, illegally, doing them themselves. Again, in FLa, if the owner pulls their own permits, within 1 year of a sale, its considered evading contractor license requirements (the intent of the homeowner permit was for construction, and not owner permit). Even replacing exterior doors or windows, technically requires a permit as they are a Structural item.

 

[two_bit_score]

Even replacing exterior doors or windows, technically requires a permit as they are a Structural item.

I didn't know Florida was such a nanny state.

 

[ultrarunner]

I didn't know Florida was such a nanny state.

Same where I am in California…

 

[two_bit_score]

Same where I am in California…

It's expected and accepted that Cali is a nanny state but I surprised about a lot of things I read about Florida being one.

 

[caver]

When my parents would snowbird in FL they wanted to enclose their screened in porch of their park model. The city wanted engineered drawings.

 

[paulsharvey]

Anything structural requires a building permit, and the envelope is 100% structural, so, doors/windows too. Ones that get me are, above ground pools (nobody actually pulls a permit), and a few other kinda ridiculous things. On your own home, yeah, nobody would likely ever know, or you can go get the permit fairly easily. As soon as its for hire, (or resale within 1 year), that would require a contractors license and permits.

Each county is very different on enforcement, but the building code is same throughout the state. Details on some structure is based on your wind zone of coarse, and coastal windboarn debris zone, ect.