Home Real Estate I Grew up Going To Real Estate Auctions With My Dad—These Are the Lessons I Learned
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I Grew up Going To Real Estate Auctions With My Dad—These Are the Lessons I Learned


I moved around a lot when I was younger. And I’m not talking from state to state or city to city—I moved a few doors down from wherever I was living. I never knew why, and frankly, I never asked my parents. All I knew was that I was with my family, so I went wherever they went.

It wasn’t until years later that I realized my parents were fixers and flippers.

Real Estate Beginnings 

We would intentionally move doors down from where we lived because of my family’s familiarity with the area. And it’s here that I eventually learned my first real estate lesson: Buy where you know, not where you think you know.

As a kid, my mom, dad, and I constantly drove around looking at houses. I always thought it was so boring—like, why are my parents paying so much attention to how the yard or the driveway looks? Why are they so obsessed with the trees around the property, or why do they care so much that more than half of the shingles fell off of the roof? Who knew that as I entered my 20s, I would be driving around asking myself the same questions? 

My parents loved to find distressed houses. If it had good bones (and sometimes even if it didn’t—whoops, it happens), my parents thrived on the idea of bringing a house back to life.

How quickly and effortlessly they fixed and flipped houses still dazzles me to this day. Vacant lots? No problem. Dad was in charge of the chainsaw, and Mom pulled the rope to take down a wilted tree. My parents were, and still are, some of the most hardworking people I know.

But you know what made me happy, even as a little kid? How happy my parents were to make a house into a home or a piece of property into an oasis for someone else to start their journey. And it’s here that I learned another lesson, this time a life one: Do what you love, and the rest will follow.

There are two kinds of fixers and flippers. The first are those who outsource the work to contractors, and the second are the DIYers who learn to do everything on their own. 

My parents were the second type. Every day, they were either painting, plumbing, drywalling, sanding—you name it, they did it. Today, even still, my parents have this running joke that my dad is the one who tears things apart, and my mom is the one who pieces it back together.

As I got older, I learned to appreciate the journey my parents went through with each investment they made. You know how, as a kid, you either think, I’m going to follow in my parents’ footsteps or pave my own way? The idea of fixing and flipping became something I wanted to do, too.

My First Auction and the Lessons I Learned

Almost every year, my mom would always cut property addresses out of the newspaper. I later learned that these were the properties my parents would buy at auction.

My first tax auction was with my dad. At the time, I was in my mid-teens and just excited to spend the day with him. And if I’m being completely transparent, I had no idea of what we were getting into.

We ventured over to the Buffalo Library, where the auction was being held. As we walked in, a bid number was assigned to my dad, and we took a seat with hundreds of people in this huge auditorium.

“Alright, kid, here’s what we got going on,” Dad said as he pulled out this stack of papers with property addresses listed from top to bottom. Lesson learned: Always obtain or print out the latest updated property list before you go to the auction.

He pointed to an address that was a minute down the road from where we lived. “The owners owe this much on back taxes,” he said as he shifted his finger down to a dollar amount.

My dad hands me his bidding number and says, “When this property comes up, I’ll tell you when to raise this.” I was pumped. I was not only there but also a participant in the unknown.

Everywhere you looked, you had people of all ages, bags in hand, which I later found out were loaded with cash. Lesson learned: Tax auctions are cash only—no ifs, ands, or buts about it.

“Did you see that 17 Main is up?” a man asked, this morning’s donut still stuck in his grayed-out beard. The woman he was talking to smiled and nodded but didn’t say anything. Lesson learned: Do not discuss the property you’re bidding on with anyone. And, trust me, people will try to pry it out of you.

When it came time to raise my number, I was bidding against five to 10 people. Eventually, those people dropped out, and my little arm was the only one left in the air.

“25k going once, going twice, sold to bidder #5467.” And that was that: A property was sold at $25,000 to some kid in the audience, just happy to be with her dad.

Eventually, we were told to stand in a line that was a mile long and wait for the next available cashier. Lesson learned: When you win the auction, 20% to 25% of your winning bid price is due right then and there, and the rest of the funds are due within a month.

As time passed, my interest in real estate grew, and eventually, I learned about the importance of due diligence, especially when it comes to tax auction properties. You always know the investors who didn’t do their due diligence because tax auction properties that were previously bid on go back to auction. Lesson learned: That 20% to 25% you put down as an initial deposit at auction, you don’t get that back. So, those initial investors kissed that deposit goodbye.

What to Consider at Property Auctions

Here are a few things I tend to look into before heading into a property auction:

  • Whether a property is vacant; if it’s not vacant, I’d possibly have to go through an eviction process.
  • If it’s a lot without a structure, I want to ensure it is buildable; they just don’t make land anymore, you know? If it’s buildable, it becomes more valuable to buyers.
  • I look into the current owners; if they are living, it’s possible that family members could be interested in the property. This is a whole thing and can be a legal nightmare if so.
  • I find out whether the property is in a current real estate transaction because the owners wanted to sell before it went to auction.
  • Driving by the property is crucial. I study the outside and ask myself if the property has been taken care of. If it’s a nightmare on the outside, imagine what the inside looks like. 
  • I also take a look at the neighbors’ property. Do they have no trespassing signs all around their property, garbage in their yard, or are there unnecessary things placed on the boundary lines? If so, this could mean there are property boundary issues, and they are likely to give a tenant or a seller possible issues.

Let’s back up: Say an owner decides to sell before it goes to auction. Not only are the owners pressured to get the home sold and closed on within a short amount of time, but then the pressure is on the buyer to close before the house goes to auction. Yikes.

There is also usually a flat fee that owners can pay to be taken off the list. Some owners wait the day and even minutes before the start of the auction to pay off their taxes.

Lesson learned: As a bidder, you’ll figure out that someone has paid their taxes because the property address is suddenly skipped by the auctioneer. Yay. So, if it’s the only property you went to bid on that day, even more yay.

On the other hand, you’ve got the owner who allows the property to go to auction, and it ends up selling, let’s say, for $100,000 over the back taxes price. Guess what? The owner gets the surplus amount. So, not only did they not pay their back taxes, but they also got cash for not paying their back taxes, and suddenly they had no mortgage and could go about their business buying another home.

Lesson learned: A tax auction property’s previous mortgage is often forgiven. So, let’s say back taxes are $20,000, the investor purchases at that price, and suddenly, they got a house for only $20,000.

Now, a lot of the time, renovations are needed, so a mortgage or home equity, some sort of loan, is necessary to fix up the home. This means people end up with some sort of lien on the property. Well, unless they have straight-up cash, then, well, cash is key, you know?

Lesson learned: It’s important to study the market values of homes in the investment property area and do a rough financial estimate of the possible work that needs to be done on the property. You don’t want to end up upside down in a property.

My First Investment Property Taught Me All Kinds of Lessons

My first investment property was a few doors down from where a few close family members grew up. It was a small Cape Cod, hidden behind two giant pine trees. The brush was so overgrown that it reached the top of the windows, and, in all honesty, it looked like someone hadn’t lived there for years. This place looked like a disaster to the everyday investor, even to them. 

I remember talking to the neighbors about the property. The electricity hadn’t been turned on for years, which I learned from my dad usually meant the basement was flooded, so everything would have to be replaced.

I found out the owner that lived there never brought their garbage out, so where did that end up? A big part of me was saying, I don’t know if this is such a good idea.

But this type of property, the one that was left for abandonment, was the one I grew up around, the one I was unintentionally taught to bring back to life.

Lesson learned: Don’t trespass. You’re not allowed to step foot on an auction property until you sign the paperwork that it’s yours.

Going into the bid, here’s what I knew: The property’s market value back then was $120,000. The house needed at least $50,000 in work. I could tell just from the outside that the roof needed to be stripped, the wood siding needed to be reworked, and the windows, doors, and everything else needed to be replaced. Again, thank you to my parents for teaching me what to look for.

From there, I determined an amount I was willing to bid, and I wasn’t going over it. Until I did. Lesson learned: Always set a bid limit and stick to it.

Sure, some people have financial wiggle room, great, but at this point, twenty-something me is strapped for cash, and now I had to come up with the few extra thousand I just overbid because I was so anxious and determined to get the house. Shoutout to my competitiveness.

Despite my parents’ look of angst after I proudly went over my limit, I did end up getting the property. “Congratulations, this is her first home,” said the auctioneer. He knew that because I reached out every week to make sure this property was still on the auction list. Again, remember that lesson I said earlier about not telling people? Yeah, that’s the one.

After I signed the paperwork, my house was mine, and you can bet that I drove right over to take a look, my parents proudly following behind me. And I’ll never forget when we walked in.

The basement had five feet of water in it, old photographs and letters floated on top of the water, and when we walked upstairs, paper was everywhere. In the fridge, in the toilet, on the stairs, in the cabinets, the tub, the closets. I was experiencing a hoarder’s house firsthand.

It took us at least a few months to toss out 12 tons-plus of garbage from the property, including old wood floor slabs that warped from the excessive moisture in the house and moldy drywall with flowered tulip wallpaper still stuck to it.

Once the property was ripped down to pretty much the studs, my family, friends, some contractors, and I started to rebuild everything from the ground up. Guess what? I lived in it while flipping it, and I’ll never forget that either, but that’s another story for a different day.

The house is now complete and fully updated, and once I find my forever home, it will become a rental of some sort.

The Next Investment

Flash-forward a few years after my initial investment, and Dad approaches me with a property that is right down the road from a family member. It’s a vacant lot around one acre that sits on top of a hill just overlooking the water. The property is also at the end of a private road that has a paper road leading up to it.

Let me tell you a little tidbit about paper roads: They often don’t exist on a Google Map—or any online map, for that matter. So, an anxious investor might overlook the property because they can’t find it on a map, but I knew better than to just write it off because I couldn’t GPS it.

Lesson learned: Next to each property address on the tax list is an SBL number. If you have trouble finding the property, go down to your local assessor’s office and pull out the county map to find the SBL number and where the property is located.

So there I was, staring at a gold mine of a piece of property in the assessor’s office, hoping in the slightest that some investor wasn’t going to do as much due diligence as I was at that moment.

And they didn’t. I ended up getting the property for a very low amount and more than quadrupling my original investment.

Final Thoughts

When I geek out on tax auction stuff and tell people about it, I usually get four different responses. The first reaction is, “I’d love to go with you next time to check it out,” and they do go, but that’s the end of their interest. The second is, “Wow, that’s amazing,” but they don’t care enough to do it. The third is the person who seems interested but will never act. The fourth are the people who see and act on the value by becoming a tax auction investor.

If it weren’t for listening and living through my parents’ story, I would be stuck in a 30-year mortgage, paying double the amount of what my property is actually worth by the end of it.

So this is my story for the fourth type of person. I know you exist because, at one point, I was you.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.



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