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.