First you check for properties in an area your interested in, then you have a prelim title search done on the ones that show some promise, do the math and attend the auction (usually on the front steps of county court house).
It doesn’t cost anything to watch one, if you want to bid, you take a cashiers check to the auction. Before the bidding, you show the auctioner your check and its amount. When the bidding starts, you can bid up to your amount on your cashiers check. Naturally you don’t know what the amount the other bidders brought to auction. Sometimes you could be the only bidder besides the bank.
In a trustee auction all secondary liens and judgments drop off the note except some tax liens. Its not a bad way to buy rental property, but at the present time prices are a little dicey. You could still make a killing now and then. Say you have a house with a $100,000 first and a 300,000 second. If the second trust deed holder messes up and doen’t cure the loan, a bid of $100,001 would leave the banks automatic bid of $100,000 out of the loop. From there it would be a feeding frenzy among the bidders. And like I said, sometimes no one even shows up to bid on that property.
