Tim Bell explains using foreclosure auctions to find wholesale real-estate buyers. He describes typical auction entry/bid requirements (example: $5,000 cashier's check, non-refundable on sale, 24 hours to bring balance), why attendees are ideal buyers (already investment-minded and have immediate cash), recommended behaviour (arrive 30–60 minutes early, be discrete, collect cell numbers to text/email flyers), and supporting statistics (about 80% leave empty-handed; only ~15–20% win bids).
Questions this video answers
A $5,000 cashier's check written to the auction house.
The $5,000 becomes non-refundable and the buyer has 24 hours to bring the balance as another cashier's check.
24 hours.
About 80%.
About 15–20%.
Chapters
Alright, the next technique that we want to talk about is going to the foreclosure auction. Okay? Now there are some communities in America where the foreclosure auctions have gone online, but many communities still have in person, face to face type auctions. Now you can see from the picture here we've got this auction, we've got a bunch of people standing around, they're preparing to do the auction. You can see the gray haired gentleman here is the, the auctioneer. And then we have his assistant person, the dark haired young lady there who is helping him and all that kind of stuff. And so again, basically the foreclosure auction is a really, really good source of wholesale buyers. And here's why. I know three things, at least three things about every single person standing there bidding on properties at the foreclosure auction. Now, I don't know what the terms of your auction are, but let me tell you what the terms of my auction are. This will give you an example of how these terms work and how this works. Okay? Anybody who wants to bid on a. I'm sorry, anybody who wants to show up at the, at the auction can just show up. There's no tickets, there's no admissions. You just have to know the time and the place and you just go there and you show up. But if you want to bid on a property, that's a different story. If you want to bid on a property, you have to meet with that auctioneer's assistant. You have to give her a $5,000 cashier's check written out to the auction house. You also sign some paperwork that says that if the auctioneer points to you and says sold, at that point your $5000 is non refundable and you have 24 hours to bring in the balance in the form of another cashier's check. 24 hours, right. So that balance could be 50,000, 100,000. 2, 3, $400,000. Yes. So as a consequence of that, I know two important things about every person that's standing there at that auction thing. Number one is they're already convinced that real estate is a good investment. If they weren't already convinced real estate was a good investment, they wouldn't be standing there at the auction bidding on properties. The other thing I know about them is they have cash. They have cash. Why in the history of the earth, there has never been a mortgage loan that was generated, started and finished and closed within 24 hours. It just takes longer than that to get a mortgage loan. As a consequence, if I know that these folks are going to have to come up with the balance of their bid price 24 hours. I know that. They either have cash or a cash like resource, an immediate signature loan, a home equity line of credit, Something where they can get immediate access to cash. Well, let's think about this. Here we have a wholesale property. We have people who are already convinced that real estate is a good investment. They want to buy properties. That's why they're there bidding on properties at the auction. And number two, they have green cash money dripping out of their pockets. Well, let's see. Already convinced real estate's a good investment and have money to buy houses. If there's any other description of a perfect wholesale buyer, I don't know what it is. I just described the perfect wholesale buyer. They want to buy houses and they have money. If there's any other requirements, I don't know what they are. So that's why the wholesale auction is such a. I'm sorry. The foreclosure auction is such a perfect, perfect place to find wholesale buyers for your properties. Now, I recommend that you go there early. Go there an hour, 45 minutes or half an hour before the auction starts. Why? Because once that auction is over, these folks evaporate. They disappear like rats from a sinking ship. They just, poof, they're gone. Beam me up, Scotty. And they're gone. Okay, so go there, meet them, introduce yourself. Now here's a dialogue that you should use with them, and it's in some of the materials that you have available to you on the website here. But basically, here's how this dialogue goes. I introduce myself and I say, do you only buy properties at the auction or would you consider buying a property from another source that represents a good buy? Do you only buy properties at the auction or would you consider another source that's a good buy? I. I asked that question. Now, in all the time I've been asking that question, I've never once had a buyer say, oh, no, no, I only buy properties at the auction. I wouldn't consider anything else. No, that's not what they say. Here's what they say. They say, yeah, I'd consider anything. What do you got? Now, if I have a wholesale property, I reach into my little black leather briefcase and I pull out the flyer and I hand it to them. Now, that said, I have to be discreet. I have to be careful because that auctioneer and his assistant do not want me to use their auction to sell my properties. They spent money to attract people to that auction and they don't want me using their auction to sell my properties. So you got to be discreet. Do not let them catch you passing out information about your property because if they do, they may ban you from their auctions for life. And then you won't have access to this source anymore. Now, a 21st century alternative to giving them a flyer is to prepare a flyer that you can either email or text to them. When they say, when you say, do you only buy properties at the auction or would you consider something from another source that represents a good buy? When they say, yeah, I'd consider anything. Tim, what do you got? Say, how about this, why don't you give me your cell phone number and and I will text or email a flyer about the property that I have to you. Would that be okay? Yeah, that sounds great. Boom. Send it. And then the auctioneer and his assistant and anyone else there doesn't have any idea that you've done that. That is a cleaner, faster, better, safer way to transfer that information to those other investors that you're going to sell your wholesale deal to. So the foreclosure auction is terrific. The foreclosure auction is a great source. Another statistic that you need to know about the people at the foreclosure auction, and this is just kind of incidental side note, but national statistics show that about 80% of the people that go to a foreclosure auction walk away empty handed, disappointed they don't get a property. Only about 15 to 20% of the people that actually attend a foreclosure auction actually end up bidding on a property and getting that property. So the majority of the people that are in this group are setting themselves up for disappointment. So this gives you the perfect opportunity to offer your wholesale property to them and give you the chance to sell that property to them and give them the chance to buy that property. This is a tremendous source. I love this source.
