In this episode, a 25-acre Tennessee property bought for $90K and previously listed at $100K without selling faced absolute auction with no reserve. With 3 minutes remaining, bidding sat at $60K representing a $35K loss, then two bidders—one a mystery Nashville buyer, one a local construction group—engaged in a 45-minute bidding war that pushed the final price to $117K.
Key Takeaways:
- Auction Action Concentrates in Final Minutes Real bidding started with under 10 minutes remaining, with the auctioneer finding critical local builders just 24 hours before auction close through relentless networking.
- Out-of-State Bidders Drive Competitive Dynamics Online auction platforms enable emotional bidding wars between non-local buyers who lack detailed market knowledge, creating 70K+ swings in final minutes.
- Absolute Auctions Require Exceptional Properties Despite the profitable outcome, the extreme stress of staring at potential $50K-$80K losses for three weeks makes this strategy unsuitable for routine use.
The property sold above previous listing price through auction, validating the strategy for distressed assets, though the auctioneer’s last-minute builder outreach proved more critical than the auction mechanism itself.
(Podcast transcript below)
Welcome to Get Serious and today do I have a story for you. So many of you who have tuned in over the last month or so know that we were dealing with that absolute lemon of a property in the middle of Tennessee that we listed for absolute auction. Again, to quickly recap is roughly 25 acres that just had a power line going through it.
Um, it did have utilities, but, uh, critically what we missed, um, is that the property was listed twice within the last 12 to 18 months. And, uh, at its most recent listing, was listed for like a hundred K and did not move. And we had bought it for, uh, about 90,000. And so we hadn’t been getting any activity really any on our listing and we had listed it for.
an absolute auction through a premier brokerage in the area. And the setup was that it was going to be a three week auction period where the terms were absolute. So as long as there was one bidder and the bidder and the bidding started at 5k, if they were the only bidder that showed up, that means we would have to accept that price and
you eat whatever loss there was, you know, no, no reserve. It’s naturally super stressful scenario plus, you know, already dealing with a, you know, a highly risky property that hadn’t moved when it was previously listed or with us. And I’ve detailed the back and forth during this process in previous podcasts. But the auctioneer just kept mentioning, you know, a lot of the activity really.
happens like the last 48 hours prior. So, you know, we did, we only got a few bids, um, I think up and through this weekend, like two and a half weeks into the whole bidding process, we were only at like 15 K in bids. Maybe we got to 20 K by Monday morning, recording this on a late Thursday when the auction ended. So, I mean, there’s huge gap here and I was just trying to distract myself, you know, what type of loss we’re looking at the auctioneers like, Hey, you know,
He was turning over all these different rocks on uncovering these possible buyers. Every possible avenue to where I was still thinking, like this, like we wouldn’t have found some of these buyers anyway. Even if we had it listed, you know, he was getting out of state people registering, they had a huge online presence. You know, he was on the boots on the ground talking to various builders and construction groups, even some.
next door neighbors who owned parcels that directly touched our property. I mean, you could not think of a better buyer pool to potentially work with and just have this accelerated timeline to potentially get to a close. it was one of the best executed marketing blitzes I’d ever seen, but it was just like, and the auctioneer kept saying, hey, this is just like a really nasty property.
So like, we’re not sure what’s going to happen here. And then the auctioneer called me. He said, Hey, you know, been doing this a long time, usually like 48 hours out. have a pretty good idea on how things are going to go. And, um, he had called me. Yeah. Like, roughly, I can’t 48 hours ago. It’s still hard to imagine. And he’s like, dude, this is, this is not looking good. Um,
to where he’s thinking, yeah, just based on all the conversations I’ve been having and people kind of showing their hand on what they might bid for this property. We’re probably looking at like 50 to 60K exit. Like getting to 70K would be an absolute home run, but probably not gonna get there. And that was a true punch to the gut.
you know, I had to accept hate like there’s there’s possibility we’re just going to get destroyed on this property. But when I talked to the auctioneers like now, you know, have investors involved, like they’re never going to let the you know, the the margin ever get too far away from what true market value is. Like this thing is going to be bit up.
And he was feeling really confident about that, but just, you know, after this whole marketing bliss, like, yeah, this is just not, looking good at all. so, yeah, after that conversation, like it was just kind of a blur afterwards. And I was just, just stewing in anger at myself because ultimately, you know, the buck falls on me for any of the decision-making that goes into different assets. And I just, you know, I had to take a really hard look at myself and just realize, like we have
We had such a profitable last 12 months or so of our business. most of my income is derived from driving really solid profits. And here, I might have just collapsed a huge return by just eating a.
terrible loss. And so I was just already trying to mentally accept, yeah, I’m about to lose 50 grand on a terrible deal that we had no business getting involved with. Obviously, so many things got wrong. And we had bought that when, you know, the macro economy was a bit better. We had structured it to where we had a lot of protections in place in case
There was some variation in this property in terms of the exit. You know, I probably flip flopped 20 or 30 different times on whether to buy or not. And unfortunately landed on the wrong decision where I just didn’t trust my instincts enough. And we ended up investing in this property that, okay, we’re going to be eating 50 K loss. And how do we get around that? How do we ensure this never happens again? Um, and also accepting, um,
In myself that, Hey, like you’re, not at the level that you need to be. I, you really want to be the best in this. Like you’re just, you’re going to have to step up further. Like this is that this is a true wake up call. Like maybe you can eat one of these losses one more time. You know, we’re not trying to, um, you know, we’re just like, full stop. I’m never going to invest in like questionable or even poor characteristic properties. Even if we have a ton of protections baked in.
I don’t want ever do them again. Don’t want to even have the risk of something slipping by like this property did. And just realize, hey, I need to put even more time into this business and ensure that this never happens again. Like I was just letting that anger just flow and just fuel me into just being better.
knowing that, you know, hey, this is the only route forward. You’re going to earn a lot less this year, but what can you do? And I also had to report this to my business partner who I really wanted to steward our company. You he had a honeymoon there. He’s gone for a lot, you know, overseas for two and a half weeks. And I was routinely like updating him and I was like, this has been a pretty rough few weeks for the company.
And in a lot of ways, and I really wanted to deliver him better news and here it like, he just got back and I’m like, we have to mentally prepare ourselves. think we’re going to eat a 50 K loss per what the auctioneer is telling us. Um, and he was just like, yeah, okay. And I was just, I was just feeling so bad about that. Um, and. You know, that into that evening and the following day, it’s just like, okay, okay. What are these next steps that you need to do? Like what?
and how do I need to be better? And that following day, so yesterday, was a really productive time, actually. It’s really catching up a lot of Kellyn’s accelerate to automate work and just laying down further foundations. I was getting a ton done from the land price or engineering side, controlling what I could control and just, okay, gotta move forward. You gotta be a better operator. What are these steps that you can just push, push, push?
and let this negative feeling towards yourself and your decision-making be able to energize you for doing better in the future. so that was my approach from the mindset perspective and also just trying to distract myself. Like, it’s not over till it’s over. We have no idea even that prediction, because the bids were still sitting at, I think about 30K.
At that point, so, you know, there was no guarantee we were even going to get to 50K. You know, 50 or 60K that the auctioneer was quoting. So we were still short of that. And to update you through that process. So then the auctioneer called me roughly 24 hours ago and he’s like, hey, I’m feeling a lot better about this than I was the previous day. And he’s like, you know what? I think
we’re going to end up closer to 75 80. You know, it’s not going to get you to the break even like including our closing costs. Like I was really targeting 95 K’s where I’d be okay. We are breaking even on this deal. Even that of overhead on on this property. And so like, hey, you know, that’s like a 50 % jump than what you were telling me yesterday. It’s way, you know,
It’s not going to be a 50 K loss. Maybe it’ll be a 20 K loss instead. Still we’re to hurt, but, you know, not, not quite as bad. and so, you know, there’s a little bit more optimism there and he’s like, Hey, you know, I talked to some of these other, a couple other construction guys here that really know the area. They’re, they’re registering the bid right now. he had a couple other.
Buyers agents reach out to him. He’s like, yeah, they’re going to be registering their buyers and they’re excited to participate in this. And, all of their other online pushes, email, social, et cetera, that all got pushed out yesterday as well. And so you get kind of got, you know, hey, the deadline is really coming up here. Less than 24 hours. Like if you want to try to get on this train, this is your last chance. So, like that was encouraging to hear.
Um, but yeah, it’s still going to be like a nasty, uh, nastier loss. One of the biggest losses we ever eat at eight, um, you know, possible 20 K or so at the new, um, estimate from the auctioneer. So, you know, it’s like, you know, still, what can we do? Um, and also during this, like I, uh, my assistant, uh, Melvin was, you know, he was pushing so hard on, his end to like, or utilizing his Facebook account, um, to, uh, uh, share.
the auction listing over this previous weekend across all the various different Tennessee land groups. had talked about this in previous podcasts. We had already used my account for it. So he was doubling up on his account and was even getting some responses. We were trying to link people, hey, like whatever activity we can spur, this is what we need to do. Like push, push, push. our business is like, it’s, this is just a critical, critical timing to sort things out.
So I really credit, uh, uh, Melvin for, stepping up there too. And so then that brings us into today. And I, you know, I, I could have been like staying up all night and just stress and stress. I just forced myself, Hey, I’m not going to be checking the auction. Like, you know, it’s the end point is going to be noon central today, this Thursday, uh, June 12th. Um, and the auctioneer said, Hey, he’s going to call me at like 10 AM.
Central two hours before so I just didn’t let myself check like what will be what will be you know? start like getting stressed, you know an hour or something beforehand and wait for the auctioneer to call me but try to get a good night’s sleep and was able to do that work out in morning all that and so Once I was like fully present. All right, gonna take a look at the auction sites around 10 a.m. We were sitting at 50k
And so at least we had hit that minimum point that the auctioneer is pointing out a couple of days prior. Um, you know, it’s still going to be, you know, 50 K loss all, all said and done. Um, uh, but you know, it, it wasn’t at the very end of the auction. Like there was still room to go. And then the auctioneer was like, you know, I still think we’re, we’re going to be getting there. The people bidding so far, these are still more of the out of state guys, the construction guys he had talked with.
They they haven’t started bidding yet. So what let’s see where we go And so, you know at that point I started I think refreshing the page every five minutes or so as of I don’t know like the last 90 minutes or something before the auction was ending and I think yeah, roughly 90 minutes or so before the auction ended it got up to 58k. All right, that’s that’s looking better
you know, it’s, it’s cutting our losses down a little bit more, but I didn’t see the guy that, the auctioneer was saying, Hey, these construction guys, where are they at? And he said, they’re going to be bid and they’re going to be bidding. And then things just didn’t chat. think we were down to 30 minutes and I was still trying to distract myself and, trying to do some other, like catch up work with, with the AI program, but it was just, you know, staring down this potential loss. have no idea how this is going to go.
And, yeah, my, from what my member, like, again, this is such a blur, but I think we were getting down to like below 10 minutes left in the auction and we were still sitting at like roughly 60 K in bids. And I’m like, all right. Yeah. My stomach was just in knots and, you know, just sweating bullets. And I’m like, okay, wow. 35 K about to eat this loss.
It’s not that 7580 that the auctioneer was quoting the day before, but you know, not like I can do anything about it. And so again, this was like sub 10 minutes left. And then we were getting down to right around the five minute mark, know, 1155 Central and this bidding war starts. So I described this before, but up until like 50K.
in bids, was 5k increments and then up to 75k, it was 2k increments. Anything beyond 75k was a thousand dollar increments for the bidding. And when you got down to, think it was like, yeah, whatever the terms were, was sub five minutes left within the auction process and somebody else bid that would add another five minutes onto the timer. you know, let people kind of think ahead.
if they still wanted to participate and These two guys started going at it With a bidding war and it started creeping up. Yeah, here we were 60k 62k 64k now we were actually past noon And I was like, right, we’re we’re closing the gap we are you know, and then all of sudden it was you know kept going up 70k
into 75K and like, all right, we are right where the auctioneer was mentioning a day ago. We hit that limit. Now we’re at like a 20K loss, still painful, in the right direction. And it just, it kept going up. And at this point, I think right around the 80K market, like an auctioneer called me he’s like, yeah, one of these guys bidding, it’s one of the construction guys he had talked with.
Yesterday and this other guy had never even called him. just a mystery, mystery bidder also in using Nashville, which is fairly distant from wherever the property was. but he didn’t know who this guy was, but the other, builders in the area, like they were extremely, I mean, both cash and asset rich. it’s like, yeah, if these guys, these guys can just keep bidding, who knows how long, like they are very well financed.
Um, and he was just describing a strategy and he’s like, you know, again, been doing this a while, like when I’m trying to reach out to some of these builders, like he doesn’t like to give them, you know, two weeks of DD where they can really talk themselves out of a deal. And that’s kind of strategy with auctions. Like, okay, there’s real time pressure here. You have a very limited time. And I used to invest in tax deed auctions and yeah, that’s like, you can kind of start getting caught and just, it’s really easy to click a button online auction and just, okay, keep bidding up, keep bidding up.
You don’t want to lose out from it, even if the numbers don’t necessarily make sense. You completed all your DD. and you know, it worked in this case was like, Hey, he’s got, got the hooks in again. He only found these builders a day prior to the auction ending, like just such a stroke of luck. And now, now they were involved in a bidding war and then it just, kept going up and kept going up. And then all of sudden we were at, you know, we hit the 95 K mark.
Holy cow, this is unbelievable where I thought there was no chance, absolutely no chance based on what we had talked about that we’re going to break even on this deal. You know, again, less than 48 hours ago, I thought I was going to lose 50k. Now I’m broke even and still the bidding wasn’t done. know, was again on the line with the auctioneer and like his whole brokerage. were watching this like, yeah, these guys are just
They’re going at it here and kept bidding up, kept bidding up. And after like roughly 45 minutes past the initial due date of the auction, we ended up with a final closing price of $117,000. And it actually got sold to the mystery bidder in Nashville. So he outlasted the well-financed group that was more local.
And again, keep in mind, there’s a 10 % buyer’s premium that they have to pay on top of their price. So was almost like 130 K all in for that. And our sell side, it’s like probably sub $1,000 worth of title costs, barely anything. We don’t have to pay a commission. And I had asked the auctioneer, like, have you ever dealt, you know, this is great to hear. Like, this is just.
Absolutely wild. But you know, the money’s not going to be in our account yet. Probably like another 30 days to close. Have you ever dealt with a buyer default? He’s like, no, it’s never happened. He had one where they had to extend like two weeks, but no defaults in the language and the terms are pretty nasty. Like you can if you default as a seller or buyer like the you’re opening up yourself to a lawsuit.
in a major way there, so there’s a lot of teeth to these auction agreements. Plus 10 % is just due at the end of the auction as well. So you’re already locked in with some initial payment there. So, you know, just throwing that in for consideration, but the emotional roller coaster here is just…
It’s even hard to describe where again, you know, less than two days ago, where I thought I’m going to eat the worst loss I’ve ever had in the land business and, you know, start to question my own capabilities to now we exit, not just minimizing loss, not just breaking even, but actually getting like a solid profit on it. And, you know, some of the protections that we had built in to this deal.
with this particular investor was that we would get the first 15 K of profit on the deal without having to do any splits. So we’re actually going to retain pretty much everything from, from this. Maybe there’s be a little bit leftover. and you know, we always try to get a 1.2 X net Moic on our deals and we’re basically going to be there, multiple on, invest on an invested capital.
It is just stunning. I’m still kind of reeling emotionally from this. It’s just one of the most stressful experiences these past few weeks here, where again, you’re eating it and not knowing where you’re gonna end up on this thing until literally the last five minutes of the auction. It’s high risk.
High reward here. we got, we got bailed out by a miracle. again, like thinking about the implications here, I know this is a longer podcast, but it’s like, it’s just a wild story. that, you know, this auctioneer found these other construction guys locally 24 hours before the auction was done. They didn’t even end up winning, but they serve their role. bid up this other guy and we ended up with a profitable, exit on, on this,
property and you know that really went back to my instincts on this deal when we uncovered okay yeah this thing was listed and didn’t move that an auction was going to be our best shot you know it’s higher risk but a lot of auctions are done well in Tennessee and they’re like okay if listing is just not going to be a good out like how do we possibly do this and look it it didn’t end up working where
The property didn’t sell for 100K listed and now on an auction, it sold for above that previous listing price. So, you know, we had never participated in an auction before on the sell side at least. But like it proved out, hey, this is a viable card to play. I probably wouldn’t consider it as a primary because I mean, again, the fact that this was one of the worst properties we’ve ever owned.
still worked out well with an auction. Like if you actually brought like a really solid property to auction that you had a ton of margin in, that could be an interesting route to go just right off the bat instead of just listing property for areas like Tennessee or Kentucky that have a lot more routine online auctions. I’d probably actually consider that but
Again, the stress involved with just knowing it’s an absolute auction and that if people don’t show up, are just, you have no floor. You can get, you know, eat a disgusting loss. So, you know, probably lower floor, higher ceiling within auctions. But even though it worked out for us, like basically a miracle here, a scenario I did not think was going to be possible.
in, the remotest, you know, the auctioneer didn’t think it was going to be possible. none of his team did none of the whole brokerage did it just, it ended up working out in our favor. Like this is not an experience I would ever seek to repeat. yeah, I’m not attributing any skill associated with, like there was skill, to swap our strategy to going towards an auction.
versus listing because I think it was you know, this was just gonna accelerate our anticipated outcome Versus what we might get in a list process anyway, but you know The the still the true core lessons was like we had no business buying this property in the first place and I still have to take like full faults like yeah, we escaped by the skin of our teeth here Pulled
you know, victory out of the jaws of, of defeat. but yeah, I’m, not attributing any, anything beyond just like ridiculous luck, to get out of this. And, you know, all of those previous thoughts and mindsets and lessons from the last few days still apply. Like I still have to be way, way better as an operator than I had been, to avoid getting into deals like this.
you know, we’re, we shifted our criteria to not look at anything that’s questionable or poor, in characteristics, ever again, we have a better process for figuring out whether properties were ever listed, prior. And I just want to move to higher value, properties in general, you know, north of 200 K purchase price deals that might require a lot more.
focus into them, but it’s less distracting. Like I’ve just found, within the portfolio, just things slipped through the cracks and lower price properties. just didn’t give the attention that they deserved as well here. So I’d rather focus on less properties on average where there’s just less chance of things to slip through the cracks, even if the total dollar amount is higher. Cause some of those higher dollar ones like the Texas one,
And now we just got another written offer for 750K on our 400K buy and that should be able to close in 30 days. So like we’re going to get another really, really solid exit, be flush with cash again. And our Louisiana one is looking really good too at the moment. And that’s like barely, barely begun. So I’d rather do a lot more of that and just, okay, no more of these questionable properties.
infill lots are basically being phased out to that’s our other problem Tennessee property that we’re probably going to eat a small loss on it, but it’s impossible to lose 50k on it because we only spent 35 total and we have some interest now right at that 35 mark. So it’s really going to be a small loss, but it’s I have to get out of that. That’s our now that we got out of the auction property. That’s our last problem property to get out of. But we, know, we’re starting to write the ship a little bit over this last week.
whether it’s via luck or some level of skill. Sometimes you need a combo of both. But still, I’ve never been now more determined to be like, okay, there’s still a huge gap in where you are versus where you want to be from an operator perspective. And yeah, I just have to look in the mirror, accept that reality and be humble enough to know.
There’s still lot of work to do and I can be better and I know I can get there as well as my team behind me. So, this is definitely the longest pod. If you stuck with me this whole time, I’m sure you could appreciate the journey. It’s definitely one of the wildest stories and I want to share a lot more of these insights also within the newsletter.
it’s well here. So, again, sometimes you just got to survive one way or another, figure out a way to do it. Just ridiculous luck. True miracle here. Serious land.capital for any of your funding needs, land daily diligence, zero cost review of your land deals and landpricer.ai for the most reliable land pricing tool on the market. Subscribe and share. Hope you enjoyed this one. Talk to you next time. Bye.
