During these tough economic times, many people are willing to do almost anything to make a little extra cash. And thanks to a new type of property auction, locals can now make money at the expense of other people's misfortune.
It sounds pretty harsh, but it's a little bit more complicated than that. It's called a "delinquent assessment" auction.
In simpler terms...it's a chance for private investors to pay into accounts on homes that are about to foreclose...and then make money off the interest.
47 bidders packed into Reno's City Hall Chambers, hoping to score on one of 17 properties on the list. Buyers are chosen in a raffle, completely at random.
"I heard about the auction in the newspaper and decided to check it out. This is my first time," said David Barrett, Reno resident.
Some people are new to the game...others flew in just to try their luck at the housing lottery.
"I know the people who own the auction because I've been to several before, mostly in Las Vegas. But they're the same everywhere you go. I was hoping there would be fewer people, but a lot of people showed up," said Gerald Deutsch of Los Angeles.
Auction coordinators say a buyer and two alternates are chosen for each home. That person has to pay what's left on the assessment in order to become a lien holder.
"Say, for example, Countrywide wants to pay back the money from today. So they would come to the city and make that payment. The city then cuts a check to the investor. They get today's dollar amount, with 8% interest," said Keith Davis, auctioneer with the Assessment Management Group.
But to the luckiest buyers, the deal could get even sweeter. The original owner has two years to pay their debt, or the new investor collects the deed and takes the house.
"Most of these people are here for the interest, but they also realize that in two years, they could possibly end up with a property for $8,000."
A deal many buyers say is too good to pass up. They say while the odds of actually acquiring a property are very small...there is still a chance.
"There's no guarantee you'll even be able to buy it because it's done on a lottery basis. In fact, we weren't able to purchase anything because our number never came up," said Pat Barrett of Reno.
The number of homes up for auction depends on each individual homeowner. At the start of the day, 68 homes were supposed to be raffled off...but put under pressure, the borrowers paid off their debts by sale time, driving the number of homes down to just 17.
Roughly a third of the original homes on the sale list are located in the Somersett development in North Reno. The debts owed on the properties ranged anywhere from $800 dollars, to nearly $20,000 dollars.