Scott Bush

Note: This entry was from my first abortive attempt at a blog, hence the introductory paragraph.

Hey, welcome to the blog—all four of you who’ll probably read this. My best friend and colleague, Sean Neumann, has been bugging me to blog for the better part of a year (since he set it up for me) so I suppose it’s time I wrote something.

I actually have something worth posting about, too: I am officially “in the game,” where “the game” = investing in real estate foreclosures. Today I went to the bank and got $25,000 in a cashiers’ check and went to the King County adminstration building where the Seattle-area foreclosures are auctioned. To prepare, yesterday I drove around with Christopher Hall of the Foreclosure Group (they’re a company associated with Windermere who help people buy foreclosures) and looked at properties going on the block Friday. Afterward, I attended the meeting in Kirkland where the properties are discussed. My wife Crystal and I crunched some numbers that evening and we decided to bid on one out in Auburn that had good prospects.

On the way down there this morning I was super nervous and wanted to back out; I felt kind of sick and shaky. “The worst thing they can do,” said real estate guru Glenn Purdy said at a convention in Vegas I attended last March, “is say ‘yes’.” Well that’s true… part of me wanted to lose so I would be off the hook, despite knowing the numbers worked out and it was a good deal.

When I arrived (in the Seattle rain, of course), I showed the Foreclosure Group representative my cash, and he gave me another check for $100,000. The FG offers a hard-money loan to members, a service they provide so you can bid on properties up to four times more expensive than you have cash for). I showed the trustee guy my cash and license and bam—I was an official bidder. It was exciting… for about 30 seconds. He read off the opening bid, $84,010, followed immediately by a bid by the trustee itself for $140,000. This was a way for the trustee to get the minimum amount they wanted out of the property. It had the unintended side-effect of locking me out before I’d nodded, coughed, raised my hand, or whatever else counts as a bid. (Our “strike price,” or the most we were willing to bid, was “only” $100,000.)

Instead of participating, I watched the back-and-forth between about five bidders for five minutes, going up by $100 or $200 each time. Boring, really; the only funny bit was when one bidder said “163″ loudly from one side. The trustee looked at him and said “the bid’s at 163,5.” The first bidder hadn’t heard the previous view bids, but the crowd tittered. (Hey, at least they weren’t laughing at me.) The property—a 3-bed, 1-bath in 1200 sq.ft.—sold for $172,900. Cash.

It’s good to have the first one under my belt… it won’t feel so intimidating next time. The FG representatives, Kerry and Armen, were both quite nice and supportive to me. For that I’m grateful because this is a lot of cash to be tossing around!