If you’re looking to buy a HUD home w/ the intent on flipping it and it is listed as OO bidding only, and you win the bid, is there a set amount of time that HUD states that it must be Owner Occupied before you can sell it?
For example, if I buy it move into it and rehab it for say 3 months and then list it for sale, am I somehow violating HUD policy re flipping houses? After all I did live in it…all beit a short period of time…
I’ve noticed that alot of HUD homes in my area are listed at 60% of ARV and they look like great opportunities, but many of them are only open to owner occupied bidding. anybody else got insight on this?
Yes, there is a set amount of time, 1 year. And if anyone is curious, yes they DO check!!
All HUD properties start as open to owner occupants bidding on at first. This is good for only 10 days. After that time frame, bidding is opened to “All Bidders” including investors. There is simply no reason to risks the fines and possible jail time because you have to wait 10 days to bid.
BTW, that same one year time frame also applies to bidding as an owner occupant, too. So even if you bid and win on one property, you can’t bid again as a OO for at least one year. Of course, this is assuming that you’re actually going to be an OO again for that property, too.
And if anyone is curious, the fines for misrepresentation on a HUD property start at $250,000 per occurence plus possible jail time.
This posting tells me that you have no intention of making a HUD property your ‘home’, just a place to park while you build up sufficient time to circumvent the intent of the HUD program and the timeframes/standards that they have established. Yes, the HUD program’s main objective is to get the inventory off of the govenment’s boooks but it also provides a chance at low-cost housing to folks that might not otherwise be able to afford it.
My opinion: Be honest and forthcoming in all of your Real Estate dealings…not just to the exact letter of the law but to the intent also! The O/O period is only 9 days…let folks that need/deserve a chance at these properties have them…if it is meant for you to have it, it will be available for you to bid on after the 9 days.
has anybody known HUD to take less then what they are asking for.
for example I found a house today that is open to all bidders. They want 82k for it. I have comps on same street, same room count, sq. ft etc…selling for about 100-120k. However, this house was eat up w/ termites. It has cedar ciding and it was taken over…the window seals…door seals…deck…boxing…gables…everything was just destroyed. I would think 30k would probably cover the damage done by the termites…then there where other internal issues. I would bid maybe 45k on this house. Would they consider something like this…have you ever seen them take that much less?
there was an inspection report done and there was no mention of termites. Said siding was in Satisfactory condition. obviously they hadn’t moved in when the inspection was done.
You are only allowed to purchase a HUD as an OO once every 2 years. HUD keeps up with this by the social security number of the OO bidder. The OO SS# will be locked out for 2 years. The computer system will not allow the bid to be placed.
HUD will not accept a $45k offer on a $82k listed property. The net to HUD will be way too low. At least in Florida, I know HUD has recently changed their acceptance thresholds. The key factor is time on the market. Price reductions are now happening like clockwork here. But, I think a lot of it has to do with FEMA’s past involvement, especially in the Panhandle.
I’ve never heard of HUD going all the way with the imprisonment and or major fines. I was just told HUD is inactivating Brokers NAID numbers and blocking investors SS# if caught, so they cannot bid anymore. Not an issue in my part of the state, but I hear in the southern part of FL its rampid.
yes, I bought a house in May for $98k after it sat for 4 months at much,mcuh higher prices. I put $6k in and it on the market for $149k(comps very well) and showing very well. It only 3 weeks on the market. Built in 2001; no mold , no problem except holes in every wall (bad domestic violence). Good neighborhood ; howver.
I’ve "hear"under 12% under list is the magic number, but I offered 23% under and got a contract.
All HUD properties start as open to owner occupants bidding on at first. This is good for only 10 days. After that time frame, bidding is opened to “All Bidders” including investors. There is simply no reason to risks the fines and possible jail time because you have to wait 10 days to bid.
It’s interesting to note, but recently HUD has modified their process here in Texas on select homes. Starting in late-June/early-July, they started listing many homes on Saturday rather than the traditional Friday. The homes are also offered in what is called a Lottery Round that lasts until the next Wednesday at midnight (5 days). If the properties are not bought during the Lottery Round, they are then placed Off Market the next day (Thursday). They then reappear the following day (Friday) in Owner Occupied Only period, but for only 5 business days, instead of the normal 10. If they are still not bought, they then go to All Bidders.
The Lottery Round definition says the following:
[i]Q. What is the Government - Lottery Round?
A. Before Government properties are made available to the public, they may be listed in the Government Lottery Round. As part of its effort to assist communities with their housing needs, HUD has designated Revitalization Areas, and offers a limited number of properties in specific direct sales programs. These programs include the Officer/Teacher/Firefighter/Emergency Medical Technician Next Door Program or Non-Profit Program. To assist families displaced by Gulf Coast Hurricanes, HUD is currently offering properties for sale at a discount to (1) evacuees currently leasing homes from HUD and (2) other evacuees interested in purchasing HUD-owned homes located throughout the U.S.[/i]
how would you go about justifying a lower bid then they are asking for? Written statements and pics…
For example w/ this one house, it would be a good flip if it where not infested w/ termites. now there’s another 30k that’ll need to be spent in addition to the other stuff…that they anticipated.
They want 80k for a 120k house. I’m thinking about offering maybe 40k. all said and done I might make 20-30k before taxes.
You never have to justify your bid. The gist of the thread is that whether you support your argument or not, they will either accept or decline the offer based on their OWN agenda. So they may take your lower bid one time and reject a higher bid on another property another time.
You never have to justify your bid. The gist of the thread is that whether you support your argument or not, they will either accept or decline the offer based on their OWN agenda. So they may take your lower bid one time and reject a higher bid on another property another time.
Exactly! I’ve seen them take a low bid, and I’ve seen them bypass bids only a few thousand $$$'s under the list price. You just never know. The point is, you have to bid what is good for YOU. If it’s $30k under the list price, then so-be-it.
Now, from talking with my agent, who is a HUD specialist, she claims she has never seen them offer anything less than 85% list, but that doesn’t mean I won’t submit offers below that. I put two bids on a HUD recently - the first for 69% list, and the second for 74% list. They rejected both offers, and the house sat. They finally dropped the list price down almost $14k, but it didn’t mean I would go up in my offer price, because my bids worked for ME - not them. Coincidentally, the winning bid was for 84% list, but that would have been too high for ME.
yea, I was looking at 2 hud’s that opened to all bidders on like friday or monday. anyway…they are both gone today. the asking price on one was inline in my mind to flip and make money. The other was about 30k too high. anyway, they go quick…