REAL ESTATE AUCTIONS BLOG

If you buy a fully leased commercial property at a fair market price, you are going to have to wait for inflation to increase the value of your rentals and thus the capital value. Alternatively, if you buy a property that has some vacant space, with some rents that are below market, rooftops that are underutilized, storage space that is not leased, and a host of other features that you can do something with, then you can exchange your ideas, thoughts, energy, and enthusiasm for huge chunks of capital value very quickly. In other words, you are an extremely important factor in the real estate you acquire.

Another way of expressing this is to say that when I buy a property, it is a different property from when you buy it. Physically it is the exact same property, but since the ideas that I bring to the table are likely to be different from the ideas that you bring to the table, the property itself ends up being different.

Whether you like it or not, you end up being part of the equation. That is why the more ideas you have in your head, the more value you add. That is how I came up with another signature statement:

The most valuable piece of real estate is the six inches, give or take an inch or two, between your right ear and your left ear. What you create in that space determines your ultimate wealth and happiness.

While in general we have a lot of control over our assets, we have relatively little control over our liabilities. In many parts of the world, it is impossible to fix the interest rate on your mortgage for more than a handful of years. Where you can, make sure you fix the interest rate!

One of the huge advantages of the real estate market in the United States relative to many other countries is that it is possible to obtain mortgages—even 30-year mortgages—where the interest rate is fixed. I am astounded at the number of investors who choose not to fix the rate. For the sake of perhaps a 0.5 percent lower initial interest rate, they are willing to risk interest rates going through the roof in the future. It is a folly not only committed by legions of otherwise sane investors, but also aided and abetted by armies of mortgage brokers who no doubt get a better commission on loans that turn out to be more lucrative for the banks.

Furthermore, you should avoid any requirement for a personal guarantee on any real estate loans. The reasons are twofold.

First, a real estate investment should stand up on its own two feet. The risk of having a personal guarantee is that it may be called up, and you would be forced to pay off principal on a loan taken out by an entity with limited liability. Signing a personal guarantee, of course, breaks this liability fire wall.

The second reason why you should avoid any personal guarantees is that when you apply for future loans, banks will often ask for a list of your contingent liabilities—these are liabilities that may end up on your shoulders. The more items in this list, the more reluctant a bank will be to lend you any money.

Based on this simplistic analysis, the country should not be doing very well at all economically, and yet the gross domestic product (GDP) is robust and strong. The reason, of course, is the so-called invisible income that Great Britain derives from more than a century of having made judicious and fortuitous investments abroad. Take the insurance industry, for instance. Great Britain controls more than 70 percent of the reinsurance industry, largely through the operations of Lloyd’s of London (with Switzerland mopping up most of the remaining 30 percent). Britain similarly has substantial investments abroad in banking, pharmaceuticals, and transportation, to name a few. No doubt the Brits making these investments 100 years ago were also branded as being unpatriotic, as they were taking pounds sterling out of their country back then, but the entire nation is now benefiting from the ongoing repatriation to Great Britain of dividends, profits, rents, and realized capital gains.

Just how do these repatriated profits benefit the entire nation rather than just the companies and individuals controlling the investments? First, on entering the country, these funds push up the value of the British pound. And once the profits are in the coffers of a recipient company, that company will tend to spend the money in a number of different ways. They will invest some into research and development, employing scientists, engineers, physicists, chemists, and a slew of technical support staff. They will conduct marketing surveys and advertising campaigns, employing PR firms, communications experts, marketing staff, and legal spin doctors.

They may expand their premises, employing architects, engineers, construction workers, electricians, plumbers, painters, and the like. I think you get the picture. Money coming into a country tends to end up benefiting everyone. Money leaving a country tends to disadvantage everyone. That is why a balance of trade surplus is so healthy for a country, and a deficit is so debilitating.

• Are there internal issues—such as civil unrest, a repressive government, a history of military intervention in political matters, an upsurge in religious fundamentalism, racial hostilities, pervasive distrust of foreigners—that may make the country unstable in your lifetime or in the lifetime of those whom you may hope to someday benefit from your investments?
• Are there corruption issues—national or regional government corruption or failure to prosecute those engaged in nefarious business dealings? Did you consult Transparency International’s corruption perception index (www.transparency.org) to get up-to-date information?
• Are there external issues—such as border problems with neighboring countries, influxes of immigrants or refugees, overt or covert threats of terrorism—that may make the country unstable?
• Are there foreseeable ecological concerns—pollution, deforestation, overfarming, water and/or food shortages, not to mention the increasing anxiety about the possible effects of global warming, particularly on coastal areas—that may make the country’s economic future less desirable?
• Are there societal and cultural changes—religious or tribal strife, large immigrant populations, increasing disparity between rich and poor, underfunded or collapsing educational systems—that may make the stability of the country’s overall future less predictable?

For IRAs, the custodian or trustee is normally a bank, savings association, insurance company, or any other entity deemed by the Secretary of the Treasury to be able to carry out the responsibilities.

Banks are permitted to use record keepers of their choice. Some banks that act as custodians for self-directed IRAs appoint record keepers and administrators to provide the administrative and ministerial requirements of customers. In all cases, the bank that is shown as the custodian is the legal custodian. The record keepers and administrators act as the agent for the custodian and provide you with the services that the custodian has contracted for.

The custodian, administrators, and record keepers should have a history of providing the kinds of services you are looking for so that you can review their track record. It is important to find out if the staff has specific knowledge about the investments you want to make.

Unless you are intending to live in the country in which you are investing, it’s likely that you won’t be able to be there for the entire transaction, not to mention when unexpected problems come up. This is where it helps to find local representation. For instance, in Spain, the completion of a mortgage must take place in front of an appointed notary with all parties involved in the purchase, including the seller, the lawyers, the buyer, and lender. If you can’t be there because of other obligations or simply distance, you can assign power of attorney to a local agent who can sign on your behalf. Hiring a local property manager or letting agent who is qualified to work with international clients could keep things going smoothly. A local property manager would be familiar with the way things are done in the area and know which tradespeople to contact if something needs to be repaired. Having someone local find tenants, prepare rental agreements, deal with utility bills, collect rents, and visit the property on a regular basis is a must.

Historically, real estate has appreciated at a better rate than other investments. Stocks may come and go, but most real estate will always be there. Furthermore, not much new real estate is being produced, and the demand is high. But just like picking stocks, identifying real estate has to be done with knowledge and careful research, whether by you or your advisors. Look into eminent domain laws—can the government easily preempt your property and for what reasons? Are there environmental concerns that may affect your investment? Will that beach be there in twenty years or will a shortage of resources change the desirability of the area? What sort of zoning laws exist? What will happen to your investment if the area is overdeveloped?

Property usually appreciates in value as demand increases. Look at the appreciation of the location in constant currency value over time. Measure time in decades for a better view. You may be interested in having your property generate income, unless your investment strategy is based solely on appreciation. Having both is ideal—holding for long-term appreciation and positive cash flow is like having a strong stock that pays dividends. Rental income can have tax benefits and provide leverage for other investments.

The old saw of “location, location, location” is international. Before exploring property outside the United States, it is a good idea to understand locations here and their ability to generate income and provide appreciation. You may discover that it makes more sense to invest in your own backyard, but if you do decide to go offshore, you will know what to compare and contrast to make a good investment.

In order to provide you with thorough and comprehensible information about real estate auctions for US states we have prepared a set of separate pages for each and every American states. Now the information will be individialized for every state and accompanied with basic facts on economy of each state as well as the most popular market in the investigated area.

Our site encompasess the following subpages:

• Alabama Real Estate Auctions
• Alaska real estate auctions
• Arizona Real Estate Auctions
• Arkansas Real Estate Auctions
• California Real Estate Auctions
• Colorado Real Estate Auctions
• Connecticut Real Estate Auctions
• Delaware Real Estate Auctions
• Florida Real Estate Auctions
• Georgia Real Estate Auctions
• Hawai Real Estate Auctions
• Idaho Real Estate Auctions
• Illinois Real Estate Auctions
• Indiana Real Estate Auctions
• Iowa Real Estate Auctions
• Kansas Real Estate Auctions
• Kentucky Real Estate Auctions
• Louisiana Real Estate Auctions
• Maine Real Estate Auctions
• Maryland Real Estate Auctions
• Massachusetts Real Estate Auctions
• Michigan Real Estate Auctions
• Minnesota Real Estate Auctions
• Mississippi Real Estate Auctions
• Missouri Real Estate Auctions
• Montana Real Estate Auctions
• Nebraska Real Estate Auctions
• Nevada Real Estate Auctions
• New Hampshire Real Estate Auctions
• New Jersey Real Estate Auctions
• New Mexico Real Estate Auctions
• New York Real Estate Auctions
• North Carolina Real Estate Auctions
• North Dakota Real Estate Auctions
• Ohio Real Estate Auctions
• Oklahoma Real Estate Auctions
• Oregon Real Estate Auctions
• Pennsylvania Real Estate Auctions
• Rhode Island Real Estate Auctions
• South Carolina Real Estate Auctions
• South Dakota Real Estate Auctions
• Tennessee Real Estate Auctions
• Texas Real Estate Auctions
• Utah Real Estate Auctions
• Vermont real estate auctions
• Virginia Real Estate Auctions
• Washington real estate auctions
• West Virginia real estate auctions
• Wisconsin real estate auctions
• Wyoming Real Estate Auctions

We invite you to search for imformation about the state whose real estates you are currently interested in by means of our subpages. This should allow for a smooth and efficient real estates offers presentation for a selected state.

Foreclosure auction participants

If a seller does not specify it otherwise, anyone is allowed to participate in a foreclosure auction. Certain organizations, such as HUD, give priority to owner-occupant bidders before giving permission for investors to participate. Any additional information about an upcoming foreclosure auction should be consulted with the lender who currently owns the real estate or the auction house in charge of the sale.

Inspection completion terms

The answer is not a straightforward one, and it will generally depend on who you ask, but the one consistent statement is that inspections are crucial. If you are allowed to carry out a professional inspection finished before the foreclosure auction, this will provide you with a good perspective as to a fair bid amount when considering the cost of any required repairs. However, a professional inspection is not cheap and certain investors may want to finish the work after their offer is accepted. If you have doubts, consult a real estate attorney with regards to your responsibilities when involved in a foreclosure auction.

Warranties offered in a foreclosure auction

The majority, if not all, foreclosures are sold ‘as is’ and offer no warranty of any kind whatsoever. This means that you will be responsible for any required repairs or improvements on the real estate you have bought. If only it is possible, you are advised to have a professional inspection carried out.

Financing options available for a foreclosure auction purchase

Similarly to any other case of home purchase, including that of a foreclosure auction, you are obliged to take care for putting the funds in place before you agree to buy a real estate. It does not matter if your ability to bid in a foreclosure auction comes from cash assets or a mortgage loan, it is essential to examine your options before placing a bid.

What can be expected from a foreclosure auction?

Due to the fact that some homeowners are forced out of their home because of the unsettling circumstances, for example a divorce, job loss, illness or other problems, the foreclosure procedure is understandably difficult. A foreclosed real estate may or may not be in good shape and extensive repairs could be required. There will be no identical homes in this respect because the condition of the home will mostly depend on its former owners.

It looks like there is a considerably high level of bidding taking place in the real estate auction sections of eBay and other similar online auction companies and websites. There is a number of  sellers who take bids for a downpayment, their intention being the owner-financing of the property after the auction is closed. On the other hand, in case of some auctions, your bid becomes the first payment in a lease-option agreement. Finally, other sellers may be simply attempting to sell a property outright.

Nevertheless, it is somewhat appalling to think about buying a property without even seeing it with your own eyes, regardless of the inexpensive price of it. There are several things you should consider:

•    You may witness considerable deed and title problems could exist (liens, foreclosure, other claims)
•    You may find the property to be completely inaccessible
•    Major repairs of structures may be required
•    It may not be possible to bring utilities onto raw land and it you may end up without even a simple right to dig a well

There is a multitude of things you should keep in mind, and if you’re not acquainted with the area the property is located in you will not be aware of the typical problems usually associated with properties situated in such a place, therefore you won’t know which questions you should ask.