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  • Auction Tribe

    Paul Ribbons Property Trading via Auctions

    I recently listened to a Paul Ribbons webinar. It was informative and impressive. Clearly Paul Ribbons has had a lot of success and experience in purchasing properties at attractive prices and then selling them in a matter of weeks at an auction. He says he is a trader and highlighted his recent profitable successes.

    He was promoting his course.

    I was wondering if anyone has attended his course and what it was like? Also, has anyone successfully pursued this strategy and made a profit?

    Thanks
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    Hi 2U2D,

    In the interests of balance, have you considered any of the pitfalls of buying at auction?

    Were any of them mentioned?

    We covered the pros - and the cons - in:

    Tips for buying property at auction with David Sandeman
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    I dont advocate it as a stratagy as such but there is merit to putting 'cheap' northern lots in southern auctions so unsuspecting southern based buyers will pay over the odds for a property.
    I have seen it done with repo & portfolio property in bolton (northwest) being sold with allsops.
    3 viewing times prior to auction, over 17 different viewers (i lost count after a bit -all seemed to be local'ish investers) & on the day it sold for 20% over the guide to an invester who didnt even bother viewing it.
    The price he paid was what the property had previously been marketed at by local agents & didnt sell
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    Read Sam Collett's How to Buy Property at Auction for balance. It's an impartial guide on the how to's.of buying, and offers insights into the auction process that will be useful if you want to sell, as well.
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    Jayne Owen @jayneowen

    Editor and Writer: Your Property Network magazine

    Investor: Mozaique Property, South & West Wales and South West England

    Occasional reviewer at The Property Bookshop (@Property_Books)

    I've heard of his strategy, he isn't buying at auctions, he buys cheap and SELLS at auction.

    It sort of makes sense to me, but bare in mind auction buyers are there for a bargain, so you'd have to find one hell of a deal to make a profit.

    Something like buy at 40% BMV and sell at auction at 15% BMV.

    I've been in property over ten years and have done quite a number of deals, but have never found one discounted enough to suit flipping at auction as a strategy.

    But to be fair Paul may well have techniques that I don't use / know of.
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    Paul buys from agents and finds many or most of his deals on Rightmove.

    He is not a landlord or an investor. He does not want to buy and hold or otherwise go long.

    He sells at auction so he can be sure that the sale is done.

    He does not improve the property other than making it harder to see or more boarded up.

    He has been operating in the London or inside the M25 for a decade or longer. This is not a new strategy that has not been battle tested.
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    John Corey

    
Share your questions, learn from mistakes & crowdsource answers to your questions -> https://www.propertyfortress.com/community/
    Follow me on Twitter-> www.twitter.com/john_corey
    My blog -> www.PropertyFortress.com/blog
    RE investing discussions happening monthly in London, 2nd Tuesday of the month -> meetup.com/real-estate-advice

    (28-03-2014 06:44 PM)john_corey Wrote:  Paul buys from agents and finds many or most of his deals on Rightmove.

    So do I, so what am I missing?

    How does he get these cheap enough to sell at auction and make a profit?
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    (28-03-2014 06:49 PM)daniel_booth Wrote:  
    (28-03-2014 06:44 PM)john_corey Wrote:  Paul buys from agents and finds many or most of his deals on Rightmove.

    So do I, so what am I missing?

    How does he get these cheap enough to sell at auction and make a profit?

    If you listen to Paul speak when he delivers a 1 hour presentation, he covers some of the ways to find a deal on Rightmove.

    More or less the same way any investor will use the facility. You want to find properties that are underpriced.

    That can happen when the agent listing the property is from out of the area. They are much less likely to get the price right if they do not know the market.

    Or the property has potential to add value by splitting off a chunk of land.

    Or the seller has had 2 or more deal failures so they are happy to drop the price for a cash buyer.

    Paul then boards up the property and otherwise make it appeal to a DIY type or an investor.

    He puts it into auction and the people in the room determine the price they want to pay. That does not mean they are overpaying. If Paul purchased a bargain and then sold on at a higher price, he has a profit even with transaction costs. As noted earlier, about 3% of the time he has a loss. He makes up for the losses by running volume and by having 97% sold for a profit.

    Think of a retail shop. They buy wholesale and then try to shift the goods for a profit. Some of the time they need to discount the prices to clear stock. In other words, not every single item they sell will be sold at a profit yet the business can easily be a profitable business. You need to know how to buy right so you can sell higher to the wider market.

    Flying freeholds, legal issues with the title and other such things are all reasons that a buyer might be offering a bargain to someone who knows better how to deal with the 'problem'.
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    John Corey

    
Share your questions, learn from mistakes & crowdsource answers to your questions -> https://www.propertyfortress.com/community/
    Follow me on Twitter-> www.twitter.com/john_corey
    My blog -> www.PropertyFortress.com/blog
    RE investing discussions happening monthly in London, 2nd Tuesday of the month -> meetup.com/real-estate-advice

    It sounds like Paul relies on other people's ignorance to pay too much at auction?

    With buying and selling costs I cannot imagine that the margins are that great?

    It would be interesting for Paul to post an actual deal he has done to show the profit.
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    Ok thanks, quite an interesting strategy, not sure it's for me the whole thing about boarding it up etc. as i prefer to add value, but good luck to him if it makes him money.
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    I must be over paying for the properties we buy. We are about to buy our 300th property over 19yrs and out of all of those I could count on one hand the times we bought at a sufficient discount to make this strategy viable. Perhaps it's possible to make a couple of grand and I suppose if you are doing enough of them then it works but I would sooner do fewer deals with juicer profits.

    In our area and particularly in the current market, if we were to try that strategy our failure rate would be a lot higher than 3%. Buying anything on our patch at present below the asking price is very difficult, and for the first time in yrs we have just bought something at above the asking price..... I hate doing that, it brings me out in a cold sweat, but I know we will still exceed a 20% return after light refurb.
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    Phil Stewardson.

    Stewardson Properties.

    Stewardson Developments Ltd.

    Burson Land Ltd. & Jennings & Gilchreaste Ltd.

    https://www.stewardson.co.uk

    Follow me on twitter - @philstewardson