Auction Property Flipping

Moiz shares his experience buying auction properties sight-unseen, renovating them, and turning them into rental properties. This strategy involves higher risk but potentially higher returns through buying properties at auction without traditional due diligence.

Key Points:

• Auction Purchase Process:

  • No inspection allowed
  • No financing available
  • Wire money next day after winning bid
  • Often buying completely sight-unseen
  • Learn to pick locks and carry tools to access properties after purchase

• Property Conditions:

  • Wide range of scenarios encountered:
    • Perfect condition properties requiring no work
    • Properties needing $40,000+ in repairs (roof, kitchen, tile)
    • Houses with previous owner's belongings still inside
    • Some properties taking 2+ years to become rentable

• Financial Performance:

  • Originally underwrote for 6% returns
  • Actually achieving 12-14% returns
  • Example: Bought 4-plex for $600,000
    • Expected $800/unit in rent
    • Actually getting $1,400/unit in rent

• Risk Management:

  • Use law of large numbers approach
  • Accept some properties will underperform
  • Focus on long-term hold strategy
  • Target areas where people are moving to
  • Primarily invest in southern states

• Government Support:

  • Sometimes receive government rent assistance
  • Can get 18 months of rent covered
  • Late fees sometimes covered
  • Helps reduce risk of non-paying tenants