Posted by Julie on June 28, 2001 at 19:07:35:
and your investor gets to pay double closing costs?
Flipping HUD Homes - Posted by Preston NC
Posted by Preston NC on June 28, 2001 at 17:00:37:
I’d like to start flipping HUD owned properties soon but there’s one aspect I haven’t gotten comfortable with yet. Because of the bidding process, I have to have a signed contract to HUD almost immediately after my bid is accepted. From what I can tell, I generally have to use the agency’s standard purchase contracts. The problem - these contracts don’t have the “out” language (for example - I’m not obligated to close if I don’t get approval of my “partner” etc.) I’d like to use to allow me to flip.
I’d like to try to find someone to flip to between the time my bid is accepted and the time I have to close under the contract. Naturally, I don’t want to end up “stuck” with a property if I can’t find a buyer quickly. Does anyone have any experience in this area?
Re: Flipping HUD Homes - Posted by SueC
Posted by SueC on June 29, 2001 at 12:57:38:
Todd says he’s done this before, but in my experience, in my location, his method wont’ work, and here’s why: HUD uses its own closing agent/title co., and if they refuse to let you close with your buyer’s cash, then you’re out of luck.
If you don’t think you can go to closing yourself, then you will be out the $500-1000 down payment. With HUD, that’s your only option. Their docs, their requirements, their closing agent.
Re: Flipping HUD Homes - Posted by Todd (OH)
Posted by Todd (OH) on June 28, 2001 at 17:20:02:
I have done this successfully and, in my early days, un-successfully. Therefore I am a “TRUE” expert in this area 
You must either:
- Be prepared to close if you don’t find a buyer.
- Be prepared to lose your $500 deposit if you can’t close (and/or don’t find a buyer).
If you DO find a buyer BEFORE you have to close, AND your Buyer can close with cash quickly, you can do a double closing, allowing you to close with your Buyer’s cash.
Otherwise if you’re POSITIVE your deal is sweet, and its only a matter of (a short) time finding a good cash investor Buyer, then either:
- Close on the deal yourself and flip it to an investor after closing.
- Close on the deal yourself, rehab it yourself, Sell it to an owner occupant, and keep most of the money yourself.
Bottom line: If you buy it cheap enough, you should always come out ahead. If you don’t buy it cheap enough, you will have problems and/or lose money sooner or later.