Is there a way to wholesale a hud property?
I checked w/ my RE guy and he said because of there contracts,it would not be wise.Basically cause of there deposit within 48 hours and that you would have to hold on to it for 2 years.
Any help would be appreciated…
If you are talking about HUD foreclosures, if you are purchasing cash there is no 2-year holding requirement - unless something has changed I am unaware of. The holding requirement is if you receive HUD financing as part of the sale. If you pay cash, or use outside financing, there is no such requirement. Buying a property under HUD financing is easy in some ways, people that wouldn’t qualify for a low down or conventioanl loan can generally qualify for the HUD financing, but it is slower closing because of the appaerwork and it isn’t good for reselling later. But again, if buying cash or other financing (HML, etc) there is no problem for a holding period.
The real problem with wholesaling HUDs are that they require a nonassignability clause for their HUD transactions, so you can’t do a typical wholesale of selling your rights to a contract to an end investor. You have to do a double close, in which you purchase the property and close, then immediately close on a second transaction to your buyer.
Ok,Thnx!
So if you do a double close,you don’t use your assignable contract papers.
What contract do you use for double close?
The paperwork is always my issue…Thnx again…
We have wholesaled HUD properties with no problems. We perform double closings on them, and we even use bank financing on our end, no cash, HML, etc.
I have never heard of the 2-year holding thing you guys are talking about. That’s interesting. If that’s the case I wonder why I have been able to do this without any problems?
Salverston is right. You can’t assign the HUD contracts. Gotta do a double close on them. The paperwork is simple. Just sign an offer to purchase with your end buyer and get it to a title company (hopefully the same one your using for your HUD purchase, makes things easier). You already have the signed offer between you and HUD. No assignment contracts needed. Just an offer to purchase.
Nate-WI
I’ve read that one way to wholesale a HUD is to purchase it in the name of an LLC, then sell the LLC to an investor. There’s an article somewhere on this site about how to do it.
Also, pay attention: there is a period when the property first comes on the market that it is reserved for owner occupying purchasers.
It’s federal government. You really don’t want to make them mad at you.