First time bidding on a HUD


I getting ready to bid on a HUD home that has just gone to “general” bid. asking price is $52,000. here are my numbers.

$52,000 Purchase price of rehab
$10,000 cost of repairs
$0 assignment fee
$1,459 7% of loan/12 x 4 # of mos held
$0 0% Point(s) for loan origination fee
$520 Other purchase fees=appraisal, title cost, termite report,
$800 Holding cost= # mos x (taxes, insurance, utilities, etc.)
$520 Hedge factor
$5,600 Sale fees, ads w/ realtor
$70,899 Total cost of project

$80,000 ARV (After Repair Value) Low end
$9,101 Profit

rehab should cost about 7k and the house should sell for 87K. it was rehabed not too long ago, mainly holes in the walls and some carpet and paint.

Question: I currently have a buyers agent thats going to send in the offer for me. I believe the bidding will go over the asking price. The numbers still work if i bid $1500 over the asking price. Is there any addendums or strategies that HUD likes to see? Any suggestions or heads up for biding on a HUD home? This is my first time bidding on a hud home.



HUD goes strictly by the bottom line - the “net to HUD”. That number is what HUD will actually get. If you go to the HUD website, there is an area where you can see what other HUD properties were listed for/actually sold for. You should go there.

Bid quickly - if an acceptable bid is received by midnight, they will execute immediately, if not sooner!

Is your “buyer’s agent” a HUD-authorized agent?


Hey Keith,

Yes my agent is HUD authorized. This listing doesn’t accepte offers untill the end of the month. Then if it doesn’t sell, will go daily.

Where did you find sold HUD home listings? I dug around on the HUD site and ???

HUD’s are very easy to bid on. The biggest thing is the only figure they care about is the net to HUD. Highest net wins. Try and keep your net as high as possible, example keep any closing cost you want HUD to pay down as low as possible.
Purchase price - commision - any closing cost = NET to HUD

Like the previous post, your bid needs to be placed asap when the property reverts to daily bidders. The daily bid cutoff is midnight each day.

If your bidding as an investor and not an Owner Occupant, HUD will not refund your EMD if you back out for any reasons after the contract is accepted & signed. Try an ddo as much inspecting and research before you bid. Do your homework.

I agree with the others, and add that even though HUD lists a property for $x doesn’t mean that is what you have to bid. BID WHAT WORKS FOR YOU! Most of the time this probably means you won’t be the winning bidder, but it also means you won’t be stuck with a property that doesn’t meet YOUR criteria. $9k is a little slim to me for buying/reselling (I usually want a min of $15k), but it may work for you!

I never see anyone taking into account capital gains taxes when talking about buying a property at 80% and flipping it.

Where do you all calculate the capital gains at?

If you “flip”, the news is worse than capital gains. Holding the property less than 12 months and 1 day means your income off the property is considered real income, and taxed at your current tax rate, which in most cases, is higher than the 15% (? for 2006) capital gains rate. Paying only capital gains on a property would be a great deal, if you could hold onto it for 12 months and a day.