I was looking at a few Hud properties and I’m wondering if anybody knows(more or less) when you have to put a bid for a property how is the start price compare with the real market? Thank you
i don’t find many of them to be good deals…
If you understand value in your marketplace, you can find deals. There was a house here listed for $53K. I bought it for $51.5K. I put $3,500 into in and it appraised for $65K. It is rented for $650.
I think you need to know almost immediately when you see a “diamond in the rough”…this house looked like crap but we could see that it was a decent, well built house in a relatively popular neighborhood…we got a lot of “thank yous” for fixing it up nice.
In my estimation, my $55K investment for a $65K property that rents for a good cashlflow each month represents a good value.
Keith
I’ll add to what Keith has said, and tell you that the start(/list) price can be all over the board. For instance, my 1st HUD had a list price of $112k. It required only $1k in repairs. I knew it had an ARV of $125-$130k, but my numbers came out to a MAO of $101k. I had bid on upteen different HUD’s, REO’s ,etc., before that, and had never won. I didn’t become a “motivated buyer”, though, and stuck with my numbers. I ended up winning the property with my $101k bid. Today, I have tenants in giving me $100/month CF. I also have about $30k of equity, currently.
Don’t worry so much about HUD’s list price. Run your numbers, and make a bid based on YOUR numbers - not HUD’s list price.
What is your experience with condo’s offered by hud? Are the prices market or under market?
I’m asking because I saw one witch is close to where I’m going to be working, and this case I will keep it for me, then I will rent it or sell it.
Thank you for the help.
I’ve no specific HUD-Condo experience…I would expect about the same as a SFR…
Keith
I have found that (in Louisiana) as an investor you must bid about 5% over asking price to have a chance at getting the property. I have bought 2 properties from HUD using this formula.
Thank you, but I have to ask, do you use the 5% after the nine days period( all bidders), thanks again
No, the way it works in Louisiana is that the property can not go to an investor for the first 10 days-only owner occupants. After the 10 day period, it is available to investors. The first bid I offer is 5% over asking price. Don’t waste time on these properties-[/b]they go quickly!! [b]
Clarification: Don’t waste time trying to hagle prices with these properties. Offer them 5% over and hope no one out bids you. These properties do not stay available for long. Investors love to get their hands on these because you can usually get them for so cheap.
Clarification: Don’t waste time trying to hagle prices with these properties. Offer them 5% over and hope no one out bids you. These properties do not stay available for long. Investors love to get their hands on these because you can usually get them for so cheap.
I’d offer what works for you. If that’s 15% under or 15% over HUD’s list price - doesn’t matter. I personally wouldn’t bid 5% over everytime no matter what the competition. You may find yourself buying an alligator. HUD’s in my area usually go during the OOO period, and, if not, they’ll go soon after being listed during the “All Bidders” stage - usually for above-list price. However, I wouldn’t bid above their price just to get a property. My lone HUD was almost 10% below list price, but I bid on numerous others beforehand. You just never know. Stick to your criteria and your numbers.
Where would one go to provide HUD properties?
Ryan
To provide HUD properties or to buy HUD properties?
To find one to buy, go to:
http://www.hud.gov/homes/index.cfm and click on the state you’re interested in…
Keith
Thank you,
Ryan