Government Auction Sites Are A Cheap And Easy Way To Invest In Real Estate

Rising interest rates are making it harder to buy real estate, but two companies — GovDeals and Bid4Assets — give investors a way to get around it through their online real estate auctions.

GovDeals and Bid4Assets are owned by Liquidity Services Inc. LQDT, a 20-year-old e-commerce marketplace.

GovDeals has completed more than $2.6 billion in sales to 1 million registered buyers through its online auction platform. Transportation-related items had dominated the platform, but the company started prioritizing real estate in 2000, said Angela Jones, GovDeals’ senior manager of digital marketing.

“We’ve seen the growth of real estate and what online auctions can do,” Jones said. “We saw that we can provide buyers more options for their purchases. That’s when we started getting more real estate on the site.” 

Bid4Assets, the first online real estate auction website to operate in the U.S., auctions distressed real estate and personal property for private investors and federal and local government. 

“It’s open to anyone who can register and fund a nominal deposit, which ranges from a few hundred dollars to $5,000 or $10,000 on a larger sheriff’s sale,” Bid4Assets President and General Manager Jesse Loomis said. “We present attractive opportunities for investors at a discount. The tax foreclosure auctions are especially interesting — the minimum bid is the outstanding tax balance.”

For example, if $12,000 in back taxes are owed on a $300,000 home, the property will go to the bidder who makes the best offer over $12,000.

“There are a lot of single-family homes at these auctions,” Loomis said. “It’s a steady supply of discounted real estate inventory.”

Among the homes listed on the website is a 1,008-square-foot, three-bedroom, one-bath home in Charleston, West Virginia, with an opening bid of $4,201. The house, which the seller says needs a lot of work, is listed in as-is condition.

Bid4Assets also offers commercial properties, such as a 2,200-square-foot retail building in Lyons, Indiana, that’s suitable for use as a restaurant, cafeteria or bar. The opening bid for the property is $9,900.

Bid4Assets partners with government agencies throughout the U.S. to host tax foreclosure auctions, sheriff’s sales and federal forfeiture auctions. Since its inception in 2000, it has sold over 125,000 properties at online auctions and generated more than $1 billion in government auction sales. 

Looking for an even cheaper and easier way to invest in real estate? You can invest in single-family rentals with as little as $100 using this strategy.

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