I <3 Online Auction Deals

What’s your favorite way to find property deals?

Driving for dollars, direct mail or MLS searching are a few viable methods…

But for me, these certainly aren’t at the top of the list.

Hey Moguls, Matt Andrews here. Now, I acquire properties a number of different ways. But the method I want to talk about today is the strategy that has stood out as the #1 way for me to get the best deals with the biggest spreads.

And this method is...

*drum roll please*

... online auctions!

Okay, well maybe that wasn’t as suspenseful as I had hoped, given that “online auctions” is in the title of this lesson.

Anyway, I digress...

To give you a clear picture of how to use online auctions to your advantage, I want to cover the “why,” “what,” and “how” of this strategy.

So, let’s get right into the meaty info...

Why?

Acquiring properties through online auctions has a variety of amazing benefits that many investors just aren’t taking advantage of.

For instance, this is a method that works in any market. I buy online auction deals in several states, and I have students and colleagues who are doing it in 5-6 markets each.

Whether you’re wholesaling, fixing & flipping or buying & holding, online auctions are an awesome option to fuel your business.

Plus, online auctions are convenient, because you literally can bid on properties from the comfort of your home or office. I mean, seriously, you can do this from anywhere in the world.

Picture This: You’re on a Hawaiian vacation with your family. You wake up in a luxurious suite with stunning scenery outside your window. You take a few minutes to log in to your computer and work on a couple of your property deals that will be closing soon. One deal will earn you about $47K net profit, and the other (a quick wholesale deal) will bring in $9-$10K. When you’re done, you close your laptop and go spend the rest of the day with your family in paradise.

Well, this could be a reality for you – because it has been for me. Online auctions make it entirely possible.

I want you to be able to experience this financial success that will allow you to spend more time with your family, doing the things you love to do.

What?

So, if you’re ready to get started with online property auctions, what do you? And where do you look?

Well, I’m glad you asked.

The top 3 online auction sites that I use consistently are:

Auction.com – definitely the strongest auction site, and the one that my business partner and I get the most deals from
Xome – an “up-and-coming” site for getting properties at amazing prices
Hubzu – another great option to check out

Now, certain sites seem like they have more inventory in certain markets, so my key strategy is to make sure that I’m using all 3 of these sites. This way, I’m not missing out on any deals – whether they’re in Florida, Michigan, Ohio or Indiana.

outbid I would say that Auction.com is historically where I’ve gotten the most Florida property deals, but Xome.com actually gets me more deals in those Midwest markets.

So, the morale of the story is: Use all 3 of these sites (and any others that you may find to be helpful) to ensure that you’re covering all your bases.

How?

Once you’re logged on, what do you do next?

Going into the online auction, make sure you do your research. Set your max allowable offer (MAO) for a property before you start bidding, and stick to your guns. You’re not going to win every property.

In fact, you shouldn’t.

Don’t allow yourself to get caught up in the emotion of the auction. Even if you exceed your MAO by a few thousand dollars, the decision could come back to haunt you (especially if you’re looking to wholesale).

But, the good news is: Even if you are outbid on a property, you may see that same property pop up on the online auctions within the next few days or weeks.

Here’s what I mean…

Sometimes, the top bidder ends up dropping out of the deal after he’s won it. Or, get this –the auction sites have a fake bidder whose job it is to drive up the price.

In either case, if you had the second highest offer, the auction site might contact you to see if you’re still interested in the property. And that could be your opportunity to snatch it up at a great price.

bid In fact, I’d say that about half the properties I get from online auctions are bought that way... after I have already lost the initial auction.

Just be assured that you’ll have to make a lot of offers that aren’t accepted in order to get to the deals that are the really sweet ones.

Even More to Love

One more important point that I wanted to bring up, before I let you go...

What’s cool about online auction sites is that not many people use them. Even experienced investors aren’t using them as much as they should...

Investors are buying properties off the MLS or on the courthouse steps. Or, in some cases, they’re looking for short sales or are working with asset managers to get deals.

As funny as it may sound, investors just don’t know about these auction sites – or don’t use them strategically, like they should.

So, if you want to get light years ahead of your competition, this is something you definitely need to look in to.

The Only Thing to Fear Is... Wi-Fi Outages

What are your concerns or hesitations about using an online auction site to acquire properties? Let me know in the comments section below, and I’d be happy to share my insight!