[Closed] Buying property at auction

Have you got skills in doing up properties? Can yo make reliable estimates of how much it will cost to put right and then how much it will sell for?

I hae had a bit of a look at this - it appears to me you wil only make money by doing a fair amount of the work yourself - and even then your hourly rate might not be great.

Thanks TJ. I have had experience on a practical level with renovations, helping my Dad and Grandad in their business. Doing estimates is my weak point though but this is where I'm hoping my son's skills will help. Before doing any bidding I hope to get valuations from estate agents on selling prices so I will know when to stop at the auction.
Being a cyclist has always been useful, having friends in various trades I can call on if needed.

edit: any hourly rate is better than I'm getting at the moment :0)

I'd suggest that if you are asking basic questions on STW that's probably not the thing for you...

Q - How do I make a small fortune in property?
A - Start with a large one...

Most auction properties are cash sales and it can be hard to secure a mortgage on a knacker.

Your better off having a solicitor look over the legal pack first - from experience some properties are put into auction for a reason i.e. they have issues which make them hard to sell on the open market. You will need to make sure that you are buying a mortgagable property even if you don't need one more than likely your buyer will.

You're too negative for me br. Does nobody start anything unless they have experience?!

Does nobody start anything unless they have experience?!

Not sure if this is a good strategy but I was thinking of targeting properties put up for auction by executors hoping that they will have been lived in 'til recently and so be of habitable quality before we start.

Auction properties that sell cheaply will be those that are not possible to get mortgages on - thats what I have seen when looking at stuff.

By all means have a go - but have a real long hard think about it. You need to find properties that are not of interest to other developers.

I would look at a property and do the sums on it - really try hard to work out how much it will cost to do up and how much it could sell for - then see how much it goes for at auction. then think again if it would have been worth it.

Remember tax liabilities and legal fees / building warrents etc in doing your sums

All good points TJ, thanks!
We are fortunate in that we won't have to get a mortgage, but I want to avoid any properties that need major work to get to a mortgagable state.
Initially just looking at most for redec/new kitchen/new bathroom/re-plumb and re-wire but will want to progress if all goes well.

Be carefull at auctions some stuff goes for well over the odds, when the Bob the builders stop bidding and you are up against another amateur it can all go wrong.

About 4 years ago a semi bungalow with planning permission for 2 2 bedroom flats at the side sold up the road from me for the best part of £250k, all thats happened is the bungalow has been fixed up a bit and is worth £140k ish at best. Total madness turned out she had been bidding against 2 other amateurs Bob the builders had dropped out way earlier.

Scary!

2 bed houses in the street at the time were going for £120k ish so total madness.

[i]2 bed houses in the street at the time were going for £120k ish so total madness.

[/i]

Still consider my post 'negative'?

there is usually a reason those properties are at auction......

mainly because they are really difficult to turn a profit on otherwise all the local builder / developers would have had it before it got to auction. If you want a hose for yourself then still a reasonable chance but there are a lot more people around trying this sort of thing. Good luck though.

My limited knowledge of property renovation is limited to the maxim

"you make your profit when you buy the property"

i.e you need to be snaffling up a bargain to make any money, dont assume "adding value" will be enough.

Do you watch 'Homes under the hammer'? Bit of a naff morning telly programme on BBC 1, however they give loads of tips on how to bid, pitfalls, tips on what to do up and what to just just leave, when doing up a house.
One tip I learn was always start off out side first and get the garden sorted, kerb appeal means alot when selling a propery.

We bought a tip of a house, it cost at least 10,000 more than we thought to sort out the bodged up diy of the previous owner.

Take a builder friend around with you on viewings and get a survey.

Oh and try and buy in a location you know well.

Starting at the start - set a maximum you will bid and stick to it. It is very easy to be drawn in and pay way over the odds - it's like EBay on Speed at a property auction.

The last property I bid on I set a max bid of £160k (guide of £140k). It went for £227k and (because the property adjoins my in-laws so they know what followed) the owners thought it needed just a bit of modernisation - their architect told them they had bought a plot of land, a boiler and some double glazing (the old owner had just had that done before going into a home). The new owners admitted they wished they never bought it at that price.

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I have looked at auctions & you can do loads of research as all the past results are online, well those from the main auction houses.

There is money to be made but loads of real dogs in there. As the hammer falls you have just exchanged so be aware if you can't complete then the property is resubmitted in the next auction, any shortfall from what you paid you have to pay.

Depends where you are of course, most auction stuff is in pretty shonky areas.

Good luck