White Knight Associates on BMV property part 4

White Knight Associates why auctions are such a good place to find bargains:

1. It is a place where ‘desperate’ sellers are driven to because of their need to sell quickly. This often means that they are prepared to accept a price far less than they could have achieved if they were prepared to be more patient and sell through an estate agent

2. Auctions are full of ‘tired’ properties where the owners can’t be bothered or can’t afford to give them the ‘make over’ that would secure them the maximum price. Thus this represents a real opportunity to an investor developer willing to do some work.

3. Auctions have always attracted problem properties. These are properties that have issues with ownership, structure, access, etc. Something which has prevented a sale in the traditional owner occupier market. However, as long as you do your research into these problems they are frequently resolvable or are not such a problem to an investor who views the property as an income stream and business not as a home.

4. They are increasingly full of failed buy-to-let investments. For those who have resisted the temptation to fill their portfolio with ‘overpriced’ designer apartments. The auction room is where you can often acquire these same properties 12-24 months down the line as repossessions from the mortgagee at a genuine 20-30% off the original selling price (a price that supposedly included a market discount!).