Hud Homes..can u get around owner occupancy

i’m a newbie. Looking at some hud homes but u can’t bid unless it will be your primary residence.

You are correct on the initial period they take bids from owner occupied. If they don’t get a high enough bid, it opens up to everyone which means investors.

It’s not something you want to try and get around. The fines are big and your not being honest.

i’m a newbie. Looking at some hud homes but u can’t bid unless it will be your primary residence.

Not so. As the previous poster stated, HUD allows owner-occupants only for a set period of time at the beginning. If they fail to get a good enough bid (or get no bids) they then open it up to All Bidders, which is when investors can submit bids.

Also as the previous poster said, you don’t want to try and “get around” the owner-occupied only period (OOOP) as it will eventually catch up to you. I’ve heard HUD makes random visits to homes after they are sold in the OOOP just to make sure they weren’t taken in by an unsrupulous buyer.

thanks for the info guys. i didn’t want to start out doing the wrong thing. i definitely want to be honest. i was just more curious about what would happen if you weren’t a owner occupant.

Also, If i wanted to bid, i would have to work with a real estate agent right? Agent has to put in a bid for me right?

Correct, you have to work with an agent who has registered as a HUD agent in order to submit a bid. It’s a very simple process. The HUD site has a link to find agents in your area. If you’re in St. Louis…I can help.

i was just more curious about what would happen if you weren’t a owner occupant.

The fine is something like $250,000, if I recall, so they are pretty strict about it. But you’d be amazed at the number of people who still do it anyway.

I actually wrote a computer program a while back that tracked HUD listings in my area to see if I could catch anyone bucking the system. Unfortunately, I didn’t have the time or patience to keep up with it. One thing I hate is people who try to take advantage of others (in this case other honest investors).

Also, If i wanted to bid, i would have to work with a real estate agent right? Agent has to put in a bid for me right?

Yes, an agent who is affiliated with a registered broker, anyway.

By the way, the O/O bidding period is only 9 days!

Keith

can you share some experiences (good and bad) when dealing with hud homes? thanks

With HUD, they sometimes audit the owner-occupants to make sure they’re living in the property. You’d be violating the mortgage note, so can lose the property, besides facing time. Depending on how fraudulent you are on saying you will occupy the property, I heard that you can be put in jail. A mortgage person told me she knew of a gentleman who was put in jail for not occupying the property, but I’m not sure how true that is.

With HUDs, I’ve not seen a good deal that an investor can get in my area. There are usually 20+ bids and you have to bid about 7-10k more on the good deals. We haven’t won an investor bid in a while because 95% of the time, the HUD is sold on the owner-occupant round.

Then again, we have a hot market, so there are multiple offers on most homes under 200k.