Posted by Joe Baysh on December 05, 2000 at 09:28:02:
Thanks all for some great insight. My plan, if the property is sound, is to buy it, fix it sell it and profit (fingers crossed). I’m taking my neighbor along, who is also our town’s building supervisor (not the town where property is located) and will only bid on the property if there is not structual or other hidden damages.
I agree the low listing price sends up a red flag.
Hud deal - Posted by Joe Baysh
Posted by Joe Baysh on December 04, 2000 at 21:33:25:
I’m very much a newbie at this and have come accross a HUD house in my area. Broker says its been available for a month now with few people even looking at it. HUD is asking 101,000 with houses in that area selling around 200 to 220.
Its listed as UI, but broker once again says that house dosen’t need a whole lot of work. Can anyone out there familar with HUD deals give me a few heads ups on what I should be on the lookout for. I’m going out Thursday to check it out. Thanks.
Re: Hud deal - Posted by Geoffrey Faivre-Malloy
Posted by Geoffrey Faivre-Malloy on December 06, 2000 at 01:59:19:
What does UI mean?
G-Man
Re: Hud deal - Posted by HT
Posted by HT on December 05, 2000 at 17:34:54:
Many valid points have been presented in this post regarding HUD purchases.
In my area (MD), a lot of investors stopped even bothering with HUD because all the properties were being sold well over the asking price. Much of this was caused by agents telling the parties they represented to not worry about their bidding price, because they were getting in for so little down ($500-1000).
What they found out was that they submitted bids over what they qualified for or just more than they could comfortably afford. The result, six months later HUD has the same house back to reauction and the same agents pull the same “scam” on innocent victims and collect another commission.
This is not a slam against all agents or HUD, just my insight. Sometimes the truth hurts.
Re: Hud deal - Posted by Rich
Posted by Rich on December 05, 2000 at 16:45:32:
I have purchased several HUD homes in my area. I have been able to purchase a few of them at 50-60% of the finished retail value. Of course they do need significant work. However, if there is no serious structural damage,I do not even worry about wood infestation. I can take care of that. I have purchased $100,000 homes for $55,000 - $60,000. I have put up to $20,000 in repairs(doing none of the work myself)into the property. This means that after closing cost on the re sale, I will profit from $10,000 - $20,000 on the sale. (Carrying costs and commissions will determine your net amount). Find good contractors!
Re: Hud deal - Posted by SueC
Posted by SueC on December 05, 2000 at 07:38:27:
Joe, I’ve been looking at a few HUD properties in my area, and while this is kinda new to me, here’s what I’ve learned: HUD won’t tell you anything. You might be able to find out some of what’s needed if there is an escrow requirement (for owner occupants who want to use FHA financing) because it will tell you what the FHA wants to see fixed before they’ll lend. It likely DOES need a lot of work. And, if you put your $1,000 down, and find problems you didn’t know about, you lose your deposit, pretty much no matter what (if you are buying as an investor, at least). In addition, be sure to figure all your costs when looking at buying and renovating, i.e., rehab costs PLUS holding costs, rental/sale costs, etc., and see if their price makes sense: it likely doesn’t otherwise the real estate agents who list these would have already snapped it up. (At least, that’s what happens in my market.)
I would say that if there is that much potential profit in it, there is something wrong that is not evident, and it would be worth having an inspector look at the place if you don’t know what you’re looking at yourself. Structural, big plumbing problems, etc.
All that being said, I am buying a HUD condo myself - after watching this property for several months, I made an offer, which was rejected by HUD and the next day they lowered the price below what I’d offered the day before!! I’ve bought the property jointly with an investor who will be doing the work. So, it’s still probably worth looking at!
Just a little of my recent expereince. SC
Re: Hud deal - Posted by dewCO
Posted by dewCO on December 04, 2000 at 23:36:09:
With that much off the market value I’d be looking for structural problems. If you don’t know how to inspect, make sure you have the ability to do so after it’s under contract, or take someone with you.
Re: Hud deal - Posted by Dave T
Posted by Dave T on December 04, 2000 at 22:26:24:
These questions come to mind: