Buy Foreclosure Auction So You Can Buy Low and Sell High
Buy foreclosure auction so you can implement the smart investment practice of buying low and selling high. Auction prices are typically set at lower prices to attract bids, so investors have opportunities to buy properties at lower prices.
As long as investors research the properties before the auctions and study price trends in areas where the properties are located, they will be able to profit from properties purchased at auctions.
In East Tennessee, investors in distressed commercial properties have been acquiring properties at foreclosure auctions and foreclosure sales. Commercial foreclosure auctions in Tennessee rose not only because of the collapse of the economy, but also because of fraudulent practices in the mortgage sector.
The 142,500-square-foot office building along Baum Drive in West Knoxville is an example. WexTrust Group executives, the Chicago-based owners of the building, were charged in 2008 with fraud for running a Ponzi-like business operation, putting the office building into receivership.
Another is the mixed-use project near Northshore Drive and Pellissippi Parkway called Northshore Town Center. When the property became troubled, a group of local investors led by Jim Harrison and Budd Cullom acquired a portion of the real estate mortgage and then later, when the property was finally foreclosed, the group of Harrison decided to buy foreclosure auction so they can get the property at a better price.
The third distressed commercial property that was sold recently in East Tennessee was the Cityview at Riverwalk. It was acquired by Clayton Bank and Trust chief executive Jim Clayton in partnership with Denark Construction CEO Raja Jubran.
Clayton Bank was also involved in the acquisition of the troubled West Knoxville office building. When the building was put into receivership after the building owners were charged with mortgage fraud, Jay McBride, who co-owns Tennessee-based real estate investment company TJ Development, saw a great opportunity and approached Clayton Bank for financing.
McBride said the building acquisition is set to close within a month. According to McBride, his team saw strong profit prospects from acquiring the building because it had an occupancy rate of 80 percent. His team planned to push the occupancy rate higher by offering move-up opportunities to existing tenants in other TJ buildings.
According to local commercial brokers, there are other great opportunities in East Tennessee for investors looking to buy foreclosure auction, including the entertainment complex called Belle Island Village in Pigeon Forge which was foreclosed early this year.
