You can expect to pay FMV or higher. Get a normal home inspection, and at least in Philadelphia Pa, the title is guaranteed to be clean.
You will be bidding against future homeowners first then you as an investor. If a homeowner does not buy it then the investors get a chance and here is where beginners over pay for the property. You will need a broker who is registered with HUD to submit offers, you will need $500 deposit. If you win the bid, and then renig on the sale you lose the deposit.
Waste of time in my opinion.
wm-pa
I’m looking at a HUD home in my local area, which is listed as a 2/1 sfr, but upon driving past it I noticed it’s got 2 front doors, so it could be a duplex. Anyway, if it’s a duplex, I would like to look into it because I live in a good school district and very popular area. If I do look at it and make an offer, I just want to know what’s involved in the process of dealing with HUD and what things to look out for.
For example, does HUD guarantee the title? What things should I check for in the inspection? I’m thinking that if it’s a duplex, then it would be a good investment (supposing inspections/title holds up) as they’re asking $55K and I think a realistic ARV would be $85-90K. What could I realistically purchase this property for (from those of you who’ve purchased a HUD home)? I would like some guidance/advice on this as it would be my first HUD home and I would look to resell, or rent it out if it did not sell in a timely manner. I appreciate your help.
The HUD homes in Indiana start out at fair market value. There is a 5 day period where only owner/occupier can bid, after this bidding is open. The deposit was $1000 for the last ones I bidded on, and there are no contigencies. Also, all HUD houses have been winterized, so you cannot actually test the utilities until you pay for them to be turned on… after you have presented them with an offer they accept. HUD (actually Golden feather manages this process) has their standard government form, and you either sign it or you don’t. I have been told they will not accept your offer with any contigencies (not sure if this is fact). You can get some deals with HUD if you wait long enough, at least in Indiana they will reduce price (although only every 3 months on the market). With these properties you must be absolutely sure of numbers, and perform a thorough inspection. You will need a Realtor who has registered with HUD to bid. Check out these websites:
ebay(http://www.ebayrealestate.net/show.htm?http://www.ebayrealestate.net/case/h151564525.htm) and Golden Feather(http://bally.towerauction.net/i4/in/)