Another form of federal government auctions are the GSA Auctions.  I am not referring to http://gsaauctions.gov/, as those auctions are for cars and other valuables.  The GSA page that handles real estate is found at http://www.auctionrp.com.  These auctions are for properties that were owned by the government and are no longer needed.  So the properties are old post offices, excess land, and the like.  Sometimes these pages are hard to navigate and some of the auctions are not well-publicized.  Many times the minimum bid is much lower than the actual value of the property.  Here is where you might be able to make a real killing if you find the right property and bid at the right time.  Keep in mind that many of these are sealed bid auctions, so you never know if you’ve won until the auction is over.

The last kind of government auction is not a federal government auction.  It is the auction for tax-defaulted properties in the local county auction, usually held on the county courthouse steps.  These aren’t always widely advertised.  In some states, like Texas, these happen monthly and are regular as clockwork.  In other states, counties try to protect homeowners more and so they don’t publicize widely the auctions, giving homeowners who haven’t paid their taxes a bit more breathing room.  The best thing is to get on the mailing list (or emailing list) of the county assessor who can then notify you of the next auction.  Do a search for the name of the county and “tax assessor”.  This will usually lead you to the right place to sign up for a newsletter.  The county auction may only be once a year, so don’t miss out.  Study state laws and read up on the rules and regulations because each state has a different legal route for disposing of properties that are delinquent on their real estate taxes.

Once you have an understanding of how your state works, then go and find the counties you are interested.  Each county will have a different date and may have different rules and transparency.  If you manage to go to a county where there are few bidders, you can pick up a property for the amount of property tax owed.  Often times this is much, much lower than the real value.  These are the real bargains.  Just remember, you might be kicking someone out of their home, but that’s not always the case as often these properties are abandoned or rented out.  Many of these properties end up on http://www.ebay.com and http://www.bid4assets.com either before or after the actual tax auction.  In cases where the properties are resold after being purchases at auction, the properties are still cheap, but the original bidder definitely got the best deal.  People that make a living buying these properties usually don’t have time fixing them up or selling them at a high price, so they buy them, mark them up and then resell them on the internet for a somewhat cheap price.

Look into these auctions, but make sure you have the money on hand!  The last thing to keep in mind is, with government auctions they usually want cash right away so have your money or financing ready before you make a move.

Written for Richbitchitch.com by Rick Hyland

Getting Started In Real Estate Series

Part 1: Finding Cheap Real Estate

Part 2: Investing in Real Estate Abroad

Part 3: Real Estate Auctions Part 1 of 2

Part 4: Real Estate Auctions Part 2 of 2

Part 5: Should I invest in residential or commercial real estate?