Does anyone here actually made $$ with HUDs

I have been putting in bids for the past 3 weeks on HUDs and I have yet to win any bids. Do HUDs ever go for below the listing price? Some HUDs I see appear to be great deals and I have even offered listing price but still dont win the bids. Are you supposed to bid more, equal or less then the listing price?? What is your experience with winning HUD bids? Are they good for investors? Sorry for all the questions.

Thank you
Joel

Edited: 06/26/2010 at 03:01AM

Frank Adams

· Loveland, CO

1170 posts
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Icon_minipost Jul 24 '06, 06:27 PM

Hi Joe;

Are you bidding on the "southwest alliance" list on some other process? I've been investing for almost 30 years and the only HUDs I ever bid on and won were in Houston back in the late '80s (400-500 per week in the Houston metro area alone) and not very successfully. At the end of '89 I looked at my records and I had submitted about 95 bids and had won TWO. I guess I wasn't overpaying!

In my experience once "everyone" knows about something it's likely to go for "market" price. Unless it's something that needs an extensive rehab, which scares most people.

all cash
marble falls, tx

Edited: 06/26/2010 at 03:01AM

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Icon_minipost Jul 24 '06, 10:17 PM

I have been happy with the HUD deal I bid and won last year. Nice house in a nice neighborhood in Georgetown. Winning bid was well below HUD list and the house was 4 years old and "like new" inside and out after a carpet cleaning. Same floor plan selling for $15-20K above bid price. Rental market supports positive cash flow with 5% down.

Put in another bid yesterday (investor status) on a daily. House has been daily (All purchasers) for a week after the 10 day initial Owner Occupant period. Bid was just barely above the 85% mark (net to HUD) that I always heard is the minimum benchmark for HUD.

It wasn't accepted and is still available. I'm debating whether raising the bid a $100 or $200 will make any difference. I figure there's always plenty of HUDs out there and I see something I like most weeks and something to get excited about once a month or so.

My attitude is if I can "steal it" at my number fine, otherwise there will be something next week. This house is decent. Needs light work inside cleaning walls and carpet cleaning. Could add a few touches, garage door opener, light landscaping, upgrade vinyl to tile, upgrade countertops to add wow value but probably doesn't need it to lease or flip. My bid price was 15K below appraisal and roughly 35K below listing prices for similar resales in the neighborhood (same floor plan).

My primary concern is that while I feel the neighborhood will appreciate well the next two to three years, the rent is probably going to max near $1100/mo while the PITI w/5% down is going to be near $1250.

I would be curious to hear additional opinions on the above. It is an SWA house.

Edited: 06/26/2010 at 03:01AM

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Icon_minipost Oct 04 '06, 09:59 PM

I have bought 4 HuD houses in the last 6 months. I have had a great experience with winning the bid. Often the paperwork is tedious, but I have an agent who takes care of it. On these houses I have a 30-35% profit margin ARV. I am in Tarrant County, Texas

Gloria Reeves

Edited: 06/26/2010 at 03:08AM

Myka M.

Real Estate Investor · Dayton, Ohio

145 posts
1176 Influence
5 Awards

Icon_minipost Nov 05 '09, 08:47 PM

Yes, I too have bid on Hud Properties. One was going for 22,000 and I got it for 7,500. The other was going for 17,000 and I got it for 9,500. You just have to keep bidding.

The first one, My first bid was 7,000 and I really could not imagine paying any more for that one. When my Realtor told me the bid was rejected, I said welll i won't go any more than seven five. She put the bid in and it was accepted. That was the first time I had ever dealt with HUD.

I was working with a friend of mine who wanted to buy rental properties then.

Edited: 06/26/2010 at 10:24AM

Eddie Ziv

Real Estate Investor · Studio City, California

1803 posts
12555 Influence
9 Awards

Icon_minipost Nov 06 '09, 01:01 PM

I bought two HUD SFRs last year and backed off of on the third because it did not passed inspection. It is really depends which HUD service you use (I buy in Alabama which is under Hooks Van Holems) If the house is on the market for a while and went though some price drops you can get it really cheap (My first one was listed for $23,000 then dropped to $19,000 and I got it for $15,000. 2nd one was $27,000 when I first saw it, then dropped to $21,000 and I got it for $16,000 although retrospectively, I think I could have gotten it for less.

Watch for houses that say "All offers will be considered" You can get those really cheap.

One more lesson. HUD publishes its own inspection report. It can be a good guideline if it fairly new, but don't rely on it. The house that I backed off from had a great HUD inspection sheet, but it was 18 months old.

Edited: 06/26/2010 at 10:25AM

Tim W.

Real Estate Investor · Indiana, Indiana

4333 posts
23859 Influence
13 Awards

Icon_minipost Nov 07 '09, 06:24 AM

I got a HUD through my realtor and my experience is similar to everyone else's here. Just keep going until you get one.

Edited: 06/26/2010 at 10:25AM