I’m from Newark. If you’re not from Newark, you probably reacted to that statement by taking a step back. Newark, eh? Isn’t that a little…gritty?
I get it. Here in the heart of New Jersey, we’re used to people thinking that Newark is a little rough around the edges. And we are, honestly. We were built by industry and battered by hard economic times, but have come out ahead. We’ve got our own way of doing things. We value hard work and helping each other. We don’t believe in wasting time or money.
That’s why, as a professional real estate investor, I’m always looking for the best way to get leads here in Newark. After all, time and money are my two most precious commodities. The heart of my business model is to maximize both. And that’s why I looked closely at the public real estate auction here in the City of Newark.
You’ll find a lot of foreclosed or seized houses there. They seem cheap, too. But is it the best deal? Well, that’s up in the air. The city of Newark public real estate auction is a way to get leads, but in my experience here in town, it’s far from the best.
Benefits of the City of Newark Public Real Estate Auction
I certainly don’t want to pretend that there aren’t any benefits at all. There are quite a few. Some might matter more to you than others, though. Here’s the main advantages of bidding on houses at this Jersey auction.
In this business, you have to count on having a lot of opportunities to buy. You need to have projects coming up the pipeline. While you might not be able to have multiple houses in your possession at once, you can’t go a long time between gigs.
The City of Newark public real estate auction happens monthly. That means you will have pretty regular opportunities to find a house to fix and flip. You aren’t just knocking on doors and hoping.
Lots of Houses
I won’t sugarcoat things for the city I love: Newark is still going through some tough times. Our population has been falling for decades. We’re about 275,000 people and have lost over 50,000 since the turn of the century. That’s a pretty big percentage. And, while things have stabilized, and even very slowly turned around, there’s still a ton of housing turnover.
That means a lot of houses at each auction. The one that’s coming up as I write this has over 30 houses, and that’s pretty standard. I’ve also seen it go much higher. So, you’re always guaranteed a bunch of houses to bid on—in one of the best places to buy investment property in Jersey.
Low Starting Bids
You’ll find houses that have minimum bids of just $18k. But, some start out as high as $40k. That’s still pretty low, giving you a chance at getting a steal.
OK, this one isn’t really important. But for whatever reason, the city holds the auction at the Newark Symphony Hall, which may be the most historic and beautiful building in the city. I don’t know why it’s there, but I tell you: I’m not complaining.
OK, so that’s the good. What are the problems?
Expect Some Downsides at Newark’s Public Auction
There’s always some bad with the good, right? It’s the same at our public auction. While you might see a good range of potential opportunities at fairly low starting bids, it’s just not a place to rely on for regular deals. Here are a few reasons why.
Too Much Competition
Here’s a secret about the Newark public auction: it isn’t a secret at all. Right now, the Facebook group for it has over 50 people registered for the next event, with another 20 interested. And that’s just people who are in the Facebook group. I never was, and I used to go all the time.
There are way more people than houses at the Newark auction. So, there’s a pretty good chance that you’re leaving without getting anything. And, that’s a waste of a couple of hours.
Deep Pockets in the Audience
If you’re like me, you’re not a financial institution. Maybe you’re another mom-and-pop real estate investment business. I work for myself, too. I do well, but I don’t have unlimited means.
Those who show up at the Newark Public Auction representing big institutions do have essentially unlimited resources. They can bid as much as they want. At some point, outbidding them becomes an exercise in wasting money. You either won’t get the property, or you’ll pay so much you won’t see much returns, if any at all.
Potential for Overspending
You’re in an auction. You don’t want the day to be a waste. There’s a property you have an eye on. Bidding starts, and your competitive spirit is running. Next thing you know, you’ve got a house that you paid a precious pretty penny for.
I love competing but know firsthand that can be dangerous here. I’ve found myself overbidding just so I wouldn’t “lose.” But, what would I win? A house that’s an anchor on my finances. That’s just the nature of the beast.
Lack of Information
The list of 30 houses this month provides each property’s address. Do you have time to research 30 houses? Do you have time to figure out which is the best one to bid on, and how much you’ll be willing to pay for it based on how much you think you can sell it for?
Heck, you don’t even know how much work needs to be done.
And, that’s the problem. Of course, you can do preliminary research and maybe set your sights on one or two houses—but that’s where it ends. You don’t know if the floors are rotten or the foundation is cracked. There’s almost no way to find out.
So, then where are you? You may have gotten the perfect house. Or, you may have overbid for a house that’s going to need a ton of expensive work to fix up. Or, you may have gotten nothing at all out of your day, except some time at the Symphony Hall. That’s a waste of time, and potentially a waste of a lot of money.
But, there’s a better way.
A Better Way to Get Leads in Newark, NJ
I still go to Symphony Hall, but just to see music. I don’t need the auction anymore and haven’t needed it since I became an independently owned and operated HomeVestors® franchisee. I’m sure you’ve seen those “We Buy Ugly Houses®” billboards around town. Everybody has. And, they know HomeVestors has a solid national reputation.
How does that help me? Well, when a distressed Newark homeowner is looking to sell quickly, they want to call someone they can trust. That’s HomeVestors and I get the qualified lead. There’s no city red tape and not as much competition. I can inspect the house, do my research on the neighborhood, and make them an offer that is fair to them and that helps my long-term business plans. That’s a great service for the seller and a GREAT use of my time and money.
Newark is ready to grow again. It’s not the easiest city, and far from the most glamorous, but it has something special. It has grit. It has character. And it has potential. If you want to be part of that, request information about becoming a HomeVestors® franchisee.
Each franchise office is independently owned and operated.