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On $1,800 a month of rent, the most you can bid at a foreclosure auction and still earn an 8% cap rate and a 10% cash-on-cash return is $103,900. A bid of $180,000 earns a 7.2% cap rate and a 6.3% cash-on-cash return, and the first year, with 3 months before a tenant, brings in $8,102. Put your own rent in below.
Highest bid that hits both
$103,900
The cash-on-cash target is the one that stops you. Cap rate allows $162,500. Cash-on-cash allows $103,900.
At a bid of $180,000
Cap rate 7.2%, cash-on-cash 6.3% on $206,800 of cash. Stabilized income is $1,084 a month. The first year brings in $8,102, 3.9% on that cash, because the empty months are in it.
Rent is 1% of the bid, which clears the 1% screen. $76,100 over the bid that hits both targets.
A full year in which the house can be leased. Operating costs are 31.8% of the scheduled rent, inside the 50% screen. The empty months after the auction are in the first-year figure above, and out of this one.
Rent, repairs and the tax bill after a sale are guesses. The bid that still hits both targets, with each one moved against you:
Bidding $86,900 keeps both targets in the worst of these.
Selling the house after the repairs is a different sum. The foreclosure auction max bid calculator works the bid back from the resale.
Start from a leased year, then ask what bid still pays the return you want:
Net operating income
= rent × 12
− vacancy
− tax, insurance, HOA, other
− maintenance − management
Cap rate = net operating income ÷ bid
Cash-on-cash = net operating income
÷ (bid + buying costs + repairs + liens)
Bid at a cap rate = net operating income ÷ target
Bid at cash-on-cash = (net operating income ÷ target
− repairs − liens)
÷ (1 + buying costs)The two bids differ because cash-on-cash charges you for money the cap rate never sees. Repairs, a senior lien and the transfer tax are cash you wire, and they are not part of the price the cap rate divides by.
Worked through on the deal the calculator opens with: $1,800 a month is $21,600 of scheduled rent. Vacancy of 8% takes $1,728, and tax, insurance, maintenance and management take $6,870. Net operating income is $13,002. At 8% that income supports $162,500. At 10%, after $25,000 of repairs and 1% buying costs, it supports $103,900. The bid you can actually make is the lower one, $103,900.
The first year is a separate account. 3 months with no tenant, and $200 a month of carry while it is empty, leave $8,102 of cash flow at the $180,000 bid. If the rent comes in 10% low, the bid that still hits both targets falls to $86,900.
A rental calculator built for a listed house assumes a mortgage, an inspection and a tenant on your timetable. A trustee sale changes the arithmetic in four places:
Take a full year of rent, subtract vacancy, then subtract property tax, insurance, HOA dues, maintenance and management. What remains is the net operating income. On $1,800 a month with 8% vacancy, that is $13,002 a year, or $1,084 a month. Divide it by the bid for the cap rate, and by the bid plus repairs, buying costs and any liens the sale leaves in place for the cash-on-cash return. Then count the months before a tenant can move in: those months collect no rent and the first year is lower.
Cap rate is one year of net operating income divided by the price you pay. It ignores how you pay. At an 8% target, the example's income supports a bid of $162,500. A higher cap rate means a lower bid. Compare it with rented houses nearby, because a number that looks strong in one city is ordinary in another.
Cash-on-cash return is the year's net operating income divided by every dollar you bring: the bid, the buying costs on the bid, the repairs and the liens the sale leaves behind. On the example those extras pull the 10% bid down to $103,900, below the cap-rate bid, and that lower figure is the one to stop at. With a mortgage the two diverge further, because the loan changes how much of your own cash is in the house.
A quick screen: monthly rent at or above 1% of the price. The example's $1,800 is 1% of a $180,000 bid and 1.7% of the $103,900 bid that hits the yield targets. It ignores taxes, repairs and vacancy, so a house can pass it and still miss the cash-on-cash return once those are in.
Another screen: expect operating costs, vacancy aside, to take about half of the scheduled rent. In the example they take 31.8%. Use it to catch a forgotten tax or insurance bill, then trust the line items you actually entered.
Payment is due at the sale or within about a day, in cash or a cashier's check, which leaves no time for a lender to underwrite the purchase. Buyers who want a loan bring cash and refinance after the repairs and a lease are in place. This calculator prices the all-cash hold. The BRRRR calculator prices that refinance.
You have the rent. You need a house under the bid.
An account opens the upcoming trustee sales in every county we cover, with the unpaid balance from each notice beside the address and sale date, so you can set the lender's number against the bid that still hits your cap rate, and get an email when a new sale is noticed.
Every plan starts with a 7-day free trial. The tools stay free.
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Foreclosure auction max bid calculator
Enter the after-repair value and your costs; get the most you can bid at a trustee sale and still make your profit, with the 70% rule beside it and the state's deposit and finality rules applied.
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Enter the bid, the repaired value and the rent; see how much cash a refinance returns, whether the rent or the value sizes the loan, and the highest bid that still gets your cash back.
Homeowners, their lawyers and housing counselors
Trustee sale deadline calculator
Enter a state and a sale date; get every statutory deadline as a calendar date — reinstatement, notice, publication, finality — each with the sentence of law it comes from.
Anyone holding a notice — owners, heirs, investors
Notice of trustee's sale decoder
Paste a notice of trustee's sale and get it back in plain English: when and where the auction is, who is running it, what is owed, and the deadlines that follow.
Bidders, especially at their first trustee sale
Trustee sale cashier's check calculator
Enter your maximum bid; get the set of cashier's checks that can pay any winning bid up to it, and the payment terms the state's code sets.
Highest bid that hits both
$103,900
The cash-on-cash target is the one that stops you. Cap rate allows $162,500. Cash-on-cash allows $103,900.
At a bid of $180,000
Cap rate 7.2%, cash-on-cash 6.3% on $206,800 of cash. Stabilized income is $1,084 a month. The first year brings in $8,102, 3.9% on that cash, because the empty months are in it.
Rent is 1% of the bid, which clears the 1% screen. $76,100 over the bid that hits both targets.
A full year in which the house can be leased. Operating costs are 31.8% of the scheduled rent, inside the 50% screen. The empty months after the auction are in the first-year figure above, and out of this one.
Rent, repairs and the tax bill after a sale are guesses. The bid that still hits both targets, with each one moved against you:
Bidding $86,900 keeps both targets in the worst of these.
Selling the house after the repairs is a different sum. The foreclosure auction max bid calculator works the bid back from the resale.