Pre auction, Auction, Sheriff, Repossessed & PIP Properties

Private Property South Africa
Scott Picken

What amazing times we live in. On Friday we found out that FNB alone has over 90 000 home owners who are distressed sellers (missed payments for the last 3 months). Imagine the opportunities with all the banks and other platforms like myroof? Although most people know that they should be buying bank repossessed properties, most people don’t know how and are concerned of some of the horror stories which people talk about. If you are interested in taking advantage of some of these amazing opportunities there are a number steps.

Step 1 is you have to get educated. Basically you have to understand the process and the fact there are actually 5 stages in which people buy “bank repossessed properties” and each stage has different attributes, risks and transparency. It is very important to understand these so that you can make educated decisions as to the stages you would like focus on. Please click on this link to download the presentation I recently did. I have made the quality small so that you can download it. It is the audio which is most important (just over an hour).

Step 2 is you have to have your financing in place. It is very NB to get yourself pre-approved as you need to have this before you can start making serious offers. The banks now have special departments who deal with this and we can assist you.

Step 3 is choosing the property. It is very NB that you have a system and a way of evaluating property so that you can determine which properties suit your requirements. When you go to auctions all the properties sound so good and sometimes you forget you are buying property. There is a strategy to being successful at an auction and you need to go to as many as possible and watch (not buy until you are ready). Trust me it is a mixture between an art and a science and you need to watch who is good and how they do it. If you are inexperienced you will be in for some nasty surprises if you go in gung-ho and start raising your hand at every opportunity! When you are ready to buy, do as much due diligence as possible, like pulling reports on market valuations of the property (Private Property can help you do this link), then you need to go and view the property. You must always remember there is a reason this property is going to auction. Sometimes it is because of the seller, but often it is also because of the property! You need to make sure you know what you are buying, BEFORE you go to the auction. I also use a system called Property Pro from Dr Hannes Dreyer. I believe it is one of the best financial systems in South Africa to take the 27 variables involved in property and show you which property is the best for the growth and also to manage the risk. If you have a system like this it will vastly reduce your chances of making mistakes!

Step 4 – buy the property. I am not going to go into this in detail as it is different in all the 5 stages of a property being repossessed by the bank and at what stage you are buying. Please make sure you understand the risks of each stage, as it can really go wrong if you don’t understand the process and the commitment you are making.

On Saturday, after IPS’s successful event, I attended the FNB rapid auction, where there are no reserves. There were 82 properties and I stayed for the entire auction (5 hours) to learn as much as I could and let you know where the opportunities are. The bottom line is that only 19 were actually sold and this is where they received a higher enough offer (went live) where the bank was happy and accepted the offer. For the rest there is no reserve and whoever has the highest offer on the 20th of December will get the property – no matter what that offer is.

I have a schedule of some of the best properties from Gauteng, Free State, KZN and the Western Cape. The properties for the presentation we did all the research for, including the rentals and the valuation reports (ask and I can send them to you). If you are interested in another property, please let me know and we can research the information. I have presented you with as much of the information I could from being at the auction – you would not know this unless you were there.

In any market, the people who make real money are those that buck the market trends. Enjoy, get educated and take advantage of the many opportunities.

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