Posted by Dave T on June 27, 2001 at 11:08:54:
You could always try, though, I have yet to buy a HUD property that did not need at least $5K in cosmetic work in addition to some major system replacement in the first two years (roof, water heater, HVAC).
Experienced investors would have already bought this property from HUD if there were enough profit in it for them.
Hud Homes - Posted by Kris
Posted by Kris on June 26, 2001 at 01:43:55:
Does anyone out there have insite on how to do creative purchases with Hud Homes listed with brokers? I’m in the so. cal area and I saw a bunch of them, listed at or (and I saw many of them) below appraisal price. These would be great opportunities for me to buy and flip to another investor looking for more profit. But I’m not sure how to do it without using my own cash.
Anyone with information out there on how to pull these type deals off I would much much appreciate it. Thanks.
Re: Hud Homes - Posted by Dave T
Posted by Dave T on June 26, 2001 at 20:30:13:
To successfully flip, you need to buy well enough below market to leave some profit on the table for your investor-buyer.
Hard to do that with properties listed at or near FMV – properties that often need some fixup. Furthermore, HUD does not allow contract assignments. To win a HUD bid, you will have to have a preapproval letter from a lender. Before a lender will give you the letter, the lender will pull your credit report, look at your financials, and ask an underwriter if you are an adequate credit risk.
If you can get your own financing, you can still do a double closing with your buyer. Now your closing costs have probably eaten up a good chunk of your profit.
Generally speaking, HUD properties do not make good flip candidates.
Re: Hud Homes - Posted by Steve
Posted by Steve on June 26, 2001 at 08:07:33:
Hey Kris, I just seen your post and I think I can help you but I’m going out of town for three days and when I get back I will reply back with help I’m sure I can help you, just send me your email address and I’ll get back with you Friday evening, latter.
Steve,
Re: Hud Homes - Posted by Kris
Posted by Kris on June 27, 2001 at 01:43:58:
What homes do you think would make good candidate for flips then? Couldn’t I do that with the hud homes if I only flipped it for just 1000-1500?
Re: Hud Homes - Posted by Kris
Posted by Kris on June 27, 2001 at 01:36:54:
What if I wanted very little out of it flipping it, say 1000-1500? On a property that 10-15 below FMV, wouldn’t that be enough for an investor to get anywhere from 8500 to 13500 profit, provided there’s not much work that needs to be done to the poperty?
Re: Hud Homes - Posted by ReggieSC
Posted by ReggieSC on June 26, 2001 at 12:07:44:
Steve,
I would also be interested in receiving the same info. on Hud Homes. I’m also looking to flip these type properties to investor/rehabbers. I’m currently doing bird dog work for an investor here in town and any help you can give me would be greatly appreciated.
-Reggie
Re: Hud Homes - Posted by Dave T
Posted by Dave T on June 27, 2001 at 10:55:48:
Who are you going to flip to? Experienced investors would have just bought the HUD home in the first place if it could have made any money for them.
If you are going to do a retail flip, you have to first purchase the property. Then, you have to sell very quickly or else your $1000 profit is consumed by your holding costs – not to mention your closing costs when you sell.