How available capital should decide between auction, pre-foreclosure and rehab entry points
Say an investor has roughly $95k liquid and a hard money relationship that will fund 80 percent of purchase and 100 percent of rehab on a rehab file, closing in about 10 days. Comparing the three common entry points shows the capital position often decides the path more than preference does. Auction in most states requires cash at the sale, wired same day or next morning. That means the full $95k covers one purchase at maybe $85k plus fees, with nothing left for rehab until a refinance, which typically only happens after title is held and the lender can inspect. Realistically the auction path locks up all the capital for something like six weeks minimum. Pre-foreclosure allows financing because the purchase is from the owner in a normal closing, so $95k could serve as a down payment across two or three deals at once. The tradeoff is that outreach hit rates are unknown going in, and the data needed to run a real campaign costs money before a dollar comes in. The more useful frame is return on capital deployed rather than discount per deal. A shallower discount achieved across more volume, with capital cycling faster, can outperform a deeper single discount that locks capital up for weeks. Which path wins depends on how reliably outreach converts and how quickly a refinance actually closes in practice, both of which are worth tracking before committing all of one's capital to a single path.
