Cash-only auction bidding, REO with financing, or wholesaling a pre-foreclosure: where should a beginner start?
Reading county notices closely for a stretch before acting is a sound instinct. Auction guidance almost universally calls for cash or certified funds, sometimes same day, sometimes within 24 hours, and that requirement varies by state and even by county, worth confirming directly with the trustee or sheriff's office rather than assumed from general reading. The harder question is what a first-timer should realistically be able to fund. One argument: the auction is the only stage where the discount is deep enough to justify the risk, and if the capital is not there, the right move is to keep saving rather than compromise on stage. The other argument: the auction punishes buyers who cannot inspect and cannot walk away, and a beginner is better served buying an REO on cleared title with normal financing, accepting a thinner spread in exchange for an inspection and a title commitment. A third path worth naming is getting a pre-foreclosure under contract and assigning it, which removes the capital problem and replaces it with a marketing problem instead. For someone with no deals closed yet, aiming at the right stage from the start tends to matter more than optimizing within a stage, since switching stages twice is usually more costly than picking conservatively the first time.
For a first distressed purchase, what should you be able to fund?
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