Wholesaling HUD HOMES

Is it possible to wholesale hud homes? And is it done?

It depends on what your definition of “wholesale” is…

Wholesale - to contract a property with the intention of reselling it quickly at a higher price.

If that’s what you mean, then yes…but the Government is starting to crack down on it and is putting controls in place about how much over your price you can re-sell for within certain timeframes (usually 90 days…). If you can sit on it for 91 days, you’re golden.


So its not legal to put under contract and sell contract to someone else like birddogging for someone? So if the house needs rehabbed has to be at least a ninty day schedule.

I think you have your definitions mixed up.

  1. Birddogging is just when you find a property and refer it to another investor. They put the contract in and you get paid a minimal referral fee. HUD homes are usually listed on their site and/or MLS.

  2. On bidding, HUD prefers owner-occupant bids. If there are no acceptable bids for owner-occupants, they look at investor bids. I rarely win HUD bids for investors anymore because there is so much competition. Lately, I’ve also seen HUD fix cosmetic issues for maximum profit.

If you happen to win a HUD bid, I’m not sure they allow contracts to be assigned, so you’d have to check on it. Wholesaling is when someone else will close on the property and I thought HUD had safeguards in their contracts (which you have to use) that don’t allow this.

I’ll 2nd Dee’s advice and say that when you first submit the HUD package, you print the name you want on the title then, therefore, wholesaling the deal later is next to impossible. I have heard people talk about using a trust or entity and transferring/selling it to another party to circumvent this, but only in theory.

Wholesaleing is simply buying low and selling low. Wholesaling does not require contract assignment. Title seasoning is not an issue when your buyers use hard money or their own cash.

Though HUD does not allow contract assignments, you can wholesale HUD homes with a double closing. However, I doubt you will find many rehabbers or investors to sell to. Since HUD list prices are so high to begin with, it will be difficult to resell for even a small profit, yet still leave enough potential equity in the deal for your buyer’s profit.

Keep in mind when people speak of the different aspects and price ranges of buying and selling HUD homes it is their unique experience, in their market. Im sure in Dave T’s market hes right on, but in mine hes not, and in yours he may not be.

Their are ways to coming very close to assigning HUD contracts. If your goal is to tie up the property, then close on it using someone elses money , and make a profit without doing any double closings, then it is very possible.

I have bought alot of HUD homes in my market as an investor and have profited nicely on them, in fact im rehabbing one now and closing on 2 that I have sold today.

Just to clear up what khastedt had said about the 90 day rule, each bank that a potential buyer decides to use will have their own specification as to how long the property needs to be seasoned. I have run into issues on properties that I have owned for over 120 days, but when the same buyer switched loan programs the home was fine for purchase.


I was referring to the rules that the government agencies are starting to in-place…not banks.


Interesting, im game, what agencies and what rules, this sounds interesting?

I think he’s referring to the specific HUD guidelines.