I wont comment on other states or counties but I think here in San Diego it can be a viable alternative but only if you understand the risks.
First off it is not easy. We easily went to probably 40 auctions this year for a total of 8 properties. That doesn’t take into account the ones we didn’t go to or were on the way to but turned around because the opening bid was to high or there was some judgement we didn’t understand.
Risks include buying a home with major damage or some judgements that will not get wiped out. Other risks are irs liens but those have a right of redemption so you get your money back if the irs decides to exercise that right. Just know that in most cases you will not even get to look inside the home much less get an inspection done.
Are you willing to plunk down hundreds of thousands of dollars to buy a home without looking in it?
The catch is this. You CAN get a home and save alot of money doing it this way. Assuming you have the cash. What is more important is that you MUST do legwork. ALOT more legwork then you need to do if you buy a home in the conventional manner. The flippers at auction will beg off bidding if the bid gets to a point where the margin is gone.
Finally you cant buy and then refinance. You will need to season the home for 6 months. In that time you are at the mercy of the bond market. How much cash you can pull out will depend on what your home appraises at.
All this can be done. Is it easy? Nope it is harder then most people think, but you can save alot.
