Your Own “Home in the Sun”–For Less Than $100,000!
* A lot on the island of Eleuthera with an ocean view for $40,000
* A Caribbean island with prime lots a few feet from the beach for $15,000
* A sea-view apartment in the Dominican Republic for $79,000
* A three-bedroom tropical island home for $40,000
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Unlike my last auction, which took place in an old colonial building on folding chairs, today’s remate is being held in two large, red-carpeted auction salons at the Uruguayan government’s central mortgage bank. Each salon has a large movie screen in front where the properties are displayed. In total, there is seating for about 150 people. Today, it’s standing room only.
The bidding begins at shortly after 1.00 p.m. and closes at about 5.00 p.m., during the last three workdays of each month. The pace is rapid with a property being sold every 15 minutes so you’ll need to stay on your toes to keep up with the proceedings. When they have many properties to auction, the bank opens a second salon, and gets through two properties every 15 minutes. I’ve seen as many as 80 properties sold during these monthly three-day session.
Many of the houses and apartments at auction are small and are located in poor neighborhoods so it’s important that you see the property and the neighborhood ahead of time, so you know where and what you’re buying.
The people bidding at this auction were a mix of people looking for a place to live, investors who intended to fix up and flip the properties, landlords shopping for rental units, and two U.S. expats. Most people attend with specific properties in mind. All properties have a base price, and you must bid at least that much to win. (The average base price in Montevideo is around $13,700.) If no one bids–which happens in about 20% of the cases–the price is reduced and re-auctioned at a later time.
While many of the properties are in undesirable locations, you’ll always find a few gems.
One example is a 1,144-square-foot home we went to see on Calle Rio Negro, just one block from the water. With a balcony and a water view, it had three bedrooms and two baths. It was sold for just $23,000.
One small house was offered at a floor price of $2,676 but no one bid on it.
The $6,000 apartment I mentioned at the beginning–I looked at the property and found it was located on Calle Cuestas in Ciudad Vieja, Montevideo’s original historic district. Calle Cuestas is in a rundown neighborhood, and I decided that I wouldn’t want that apartment if it were free. But soon afterwards, another auction took place, and the abandoned hotel in front of the $6,000 apartment was sold to a Greek shipping tycoon for $3.3 million dollars. Restoration is now beginning, and the whole area is expected to flourish.
As it turns out, the young man who bought that $6,000 unit made a terrific investment.