You guys are missing out by not buying HUD homes. They can be a great deal. HUD homes are initially listed at the “AS is” or retail value. If they don’t sell, HUD drops the price. On top of that, HUD is very negotiable. If you wait until the house is reduced once or twice and then make an 80 or 90% offer, you can get a great deal.
I doubt you would be successful buying FHA backed houses at the forelcosure auction or pre-foreclosure. The bank usually bids what is owed on the house which is not a good deal in a declining market.
Hello Friends,
I am thinking about pursuing HUD homes for investment purposes.
If you were me and new to this, what three (3) things would you be sure to do to provide for maximum success?
Can these homes ever be inspected?
Bruce
Hea Bruce,
Please see: http://www.creonline.com/wwwboard/messages/71712.html
Where I said â?¦
Do not wait for HUD to list it.
By then, it becomes a "Retail Propertyâ??
(to be sold to the retail buyer),
(No Profit for the Wholesale buyer).
You donâ??t want it (no profit it for you).
"HUD sells to the RETAIL BUYERSâ??.
You have to be a Wholesale buyer to make a profit.
You have to be a Wholesale buyer to make a profit, Period!
I hope I was not unclear! You have to be a WHOLESALE buyer to make a profit.
Did I make my point? Your livelihood depends on it.
You make your money when you BUY, Not SELL!
If you donâ??t buy it below todayâ??s Wholesale market value (which is going lower every day).
You will pay too much.
Tomorrowâ??s values will be lower than today!
Find it Before it goes into foreclosure.
Your livelihood depends on it.
Call your Parish/ County courthouse and ask who publishes the “Legal News” or what ever it is called.
GET THE PUBLICATION THAT THE ATTORNEYS GET!!!
And expect to pay for it.
They may try to evade you, (they often do) but ask who ever it takes to get the publication that lists the â??NOSâ??, Notice Of Seizure(s) or NOD Notice of Default. It may be called something else in your area. It is the Document that is filed in a courthouse where the Lender tells the Borrower that that the Lender is sewing the Borrower. THAT is what you want. By the time that you get it, it can be as much as 2 weeks advanced notice BEFORE ANY LIST picks it up. Hence, you â??May have picked up a DEALâ?? 2 weeks before it gets on anyoneâ??s list.
HUD is greatâ?¦For Retail Buyers, Not Me!
YOU MUST BUY PROPERTIES WHOLESALE TO MAKE A PROFIT!
You said, â??Can these homes ever be inspected?â??
You are bleeding green here.
The answer is YES! Consult your â??REALTORâ?? for more details. Mind you, You Buy â??As Is Where isâ??!
Neither VA nor HUD fixes or repairs. They may escrow, but they do not repair…
What ever is wrong with the property, is your problem, not theirs. Does not matter the cost, it is your problem!
I recall when I bought a VA repo back in the 80â??s and was working on it when the ceramic bathtub wall fell in on me, termites had invaded it. The VA rep said â??you bought it as where isâ??. A lesson learned.
Happy biding!
They donâ??t argue, they win!
Good luck with it
Lee
Find a HUD agent who can assist you with submitting offers (only certain agents can)
Get your documentation lined up before you submit your first offer (doc requirements are stringent and deadline driven)
Know what you’re looking for and start your search (even submit your offers) before the properties open up to investors (properties are open to owner-occupants before investors get their shot)
And yes, I believe you automatically have an inspection period as part of the contract contingencies…
I agree with Lee. HUD homes for the most part seemed to be either overpriced or priced too close to retail that making a profit is hard. OCCASIONALLY they will make a mistake and price them too low, in which case you might find a bargain, but those instances are not common, I feel. I’ve never understood those investors who claim to successfully buy HUD homes at a "worthwhile discount. Either they’re lying or seem to be incredibly lucky.