Can anyone explain why you would soley go after HUD owned properties?
I have seen an investor own 85 houses currently and all of them were bought through HUD.
I understand a little bit of how HUD properties can be bought by investors but is there something i am missing because most Hud houses are not in that great of shape and the starting bids seem to be higher than the 40% ration a lot of investers use. If you can help me understand i would greatful
Thanks Phil
it was their niche.
His niche, and one other advantage is that closing dates can be 60 days from the contract date, many foreclosure companies would not allow for that.
HUD drops the price “X%” after so many days have passed and no one has bought, and they will accept bids of “Y%” of the current listing price.
If you get to know these properties, I think you can occasionally find decent deals there, at least for rentals.
Add in the fact that the selling agent gets a 5% commission (and I’ll bet your friend is an agent), and you can take another 5% off (if you’re an agent, of course).
If you watch the inventory and know how to bid, I think there is long-term money here. This all assumes that you can rent the properties for enough to cover your note and expenses. In some markets, that’s hard to do without a huge equity contribution.
I think the best part about HUD homes, are the financing options…what do you guys think?
And for anyone who’s bought them…what is your typical % down?
I think the best part about HUD homes, are the financing options…what do you guys think?
How so? How are they financed differently from any other home?
And for anyone who’s bought them…what is your typical % down?
0-20%
as an INVESTOR - your options for financing HUD homes is pretty standard. now if you buy as an owner occupant - then there can be different options.
HUD properties require alot of rules to follow - i think the rules are somewhat simple - but only in as much as you know them!
and just like any other property - buyer beware - HUD properties can sit - A LONG TIME without utilities on and vacant for some time. you buy them “as-is” in most cases and know this - HUD is MUCH MORE cooperative with owner-occupants than they are with investors.
HUD is trying to change alot in terms of streamlining the process in order to avoid houses sitting for long periods of time, especially vacant with utilities shut off.
if you have a system for tracking them, it’s to your advantage to really know the local markets where you’re looking and keep a close watch for certain HUD properties.
one thing to keep in mind when buying HUD properties is that the agents decide their own commissions when they put in your bid, it does not necessarily have to be 5% it can be $0, if I were not an agent I would tell my agent prior to bidding what commission that I was willing to pay them.
When it all boils down you pay the commission because HUD will accept your offer based on the NET price which is your offer less commissions. If you have a greedy agent, your offer could be higher than the winning offer if the other agent decides to take less commission than your agent.
I’ve bought 9 properties in the last 18 months, 7 of them were HUD properties. Why? I bought them for 60 - 70% of ARV. In the midwest, if you know your market well, they are steals!
find,
how are you financing them?
WOW, The hud list around here is just PILING up cuz the PRICES are so high it’s RIDiculous. Only owner occupants can even think of living there.
They put prices at the ARV when the houses need ALOT of work first.
houses that have been on HUD’s list since september of last year.
Are our tax dollars paying for this nonsense?
:banghead
Hi you guys!
Is anyone experienced in wholesaling HUD properties? If so, are the contracts assignable? or do you have to double close? If a double close is necessary, do they dictate the Title company used?
Thanks in advance!!
Are you an Agent or work closely with one. I would love to hear how you found those deals.
HUDs are NOT assignable…you would actually have to take pssession and then resell…
Keith