iBidcondo.com anyone?

[Leonidas]

No reserve, no minimum online auctions of condominiums. I'm not sure I'm in the market for a condo, but I am always interested in making a profit. It took me a few minutes to figure it out, but here's the gist of the deal.

A developer or realtor puts a condo up for auction on iBidcondo and the website sells virtual "seats" to interested bidders. The total price of all the seats sold is supposed to equal the price of the condo itself. The average auction seat price is $100 and the number of seats sold will be determined by the property’s list price. For instance, a $400,000 dollar priced property will have 4,000 seats sold at $100.00 per seat. A specific auction only happens once all seats have been sold.

The highest bidder, regardless of price, wins the condo. The "majority" of the money paid by the bidder goes to a registered charity of the bidder's choosing.

They have had one auction so far, a $690,000 condo at the Star Riverside complex in Austin sold for $87,000. The next auction takes place on July 27th, which is the same day that ABC is going to do a news story about them.

It seems to me, that even if the retail price of the condo was double or triple the actual value, $87K was a steal. I don't know squat about real estate as an investment, and I can imagine plenty of pitfalls, but it is an interesting idea.

Any thoughts?

iBidcondo.com

 

[Brat]

I don't see the point of the charity piece, but on line auctions for condos seems to me to be a viable business. All the documents many buyers typically request can be available on line. The one missing piece would be minutes of the last year's board meetings (which I would want).

A steal/deal or not I would never buy in an area I didn't intimately know.

 

[Leonidas]

I don't see the point of the charity piece, but on line auctions for condos seems to me to be a viable business. All the documents many buyers typically request can be available on line. The one missing piece would be minutes of the last year's board meetings (which I would want).

A steal/deal or not I would never buy in an area I didn't intimately know.

I didn't understand the charity thing either, and they seem to be flexible as to what percentage they will donate.

The one condo they have auctioned so far is still under construction. I found a video on YouTube of the winners visiting the site. It looks like they are months out from being able to move in. No board meeting minutes to read. Do you think that makes it too much of a pig in the poke?

I agree on buying someplace I know well, but Austin is not that far and I have the time available to investigate further.

 

[Texas Proud]

Man, they can come up with a lot of ways to get money....

So, all you have invested is $100... but since they need the full number of people to even start the auction... they have sold it for a lot more than they could outright... if there is not that much interest, no auction...

Then you have a number of people who are interested enough to pay the $100 bidding on the asset... so it 'might' go for a pretty high price...

It is an interesting way to do it... we will see if there is enough people interested in putting down $100 just to get in the game..

 

[FUEGO]

It is an interesting way to do it... we will see if there is enough people interested in putting down $100 just to get in the game..

Seems like it might work the first auction or two. After that, surely the bidders would figure out you can make a lot of money by bidding a little more to get the condo. If a condo is worth over $600,000, why would someone not bid $90,000 or $100,000? My guess is any potential windfall profits will be gone very soon. And you'll be out the $100. Too gimmicky for me.

So in subsequent auctions, they will probably get close to full fire sale prices out of properties, plus the $400,000 auction entry fees. I'm assuming the amounts given to charity will be small (per their FAQ, 50-80% of what?? will be given to charity) and the auctioneers make out like bandits.

 

[TooFrugal]

Too gimmicky for me.

The odds are stacked against most of the auction seat buyers.