I firmly decide to become a real estate investor and I need advise. I've been studying for months and looking for deals "fortunately" I'm a first time home buyer and I've been preapproved for an FHA loan for the maximum (271k) in Hillsborough County (Tampa) FL.
One of my strategies is to use the first time option in Homepath, HUD, and Homestep to get ahead of investors and get a better chance to get the property, the challenge is that my agent tells me this offers usually go to investors because they buy cash and these agencies prefer cash investors over FHA or FHA 203k.
How a person in my situation get in the game when competing with investors with more financial capacity.
I'd like to see what others have to say, and I don't know about Homepath and Homestep, but with HUD the first round of bidding goes to owner occupants, so I would assume for that reason alone they can't put a cash buyer ahead of you.
depends on if you are buying as an investment or if you plan to occupy it and rehab it that way. Owner occupants get first rights with all 3 of those programs. They would all rather sell to an o/o then an investor. However if you are trying to buy investment property then you are bidding against investors and cash is king. But since you can't buy investment properties with fha funds you'd be buying it as an o/o no matter what.
I plan to occupy the property for a year and then it will become an investment that I can flip or keep as a rental but my main concern is my ability to get the property before the investor. For example, if I offer 100k for a property and is not accepted and then an investor offer the same with the same conditions cash. Is it possible he/she get it because the offer is cash?
Here locally owner occupants get all the good deals, as they are the only ones allowed to bid when it goes on the market or the price drops for the first 10 days.
it's possible yes, but the scenarios that would have to happen for that to happen are rare and lengthy.
The key is if you and an investor bid during the same bid window and bid the same amount, the o/o always wins.
Make sure you read up on strategies for bidding government foreclosures,while they are not always 100% accurate they give some important ballpark ideas and concepts to keep in mind while bidding. Also, that your Realtor is well versed in bidding them.
The other thing is have you looked into non fha loans at all? If your credit and DTI doesn't require the fha loan you can get alot of great deals on 5% down programs. If you go fha you'll throw away over $4,000 on upfront pmi for what it's worth.
Great advise, thank you!!!
From what I understand during the homepath first look program... Only o/o offers will even be considered.
While there are some cash o/o buyers... You need to write some offers to have a chance.
Now some Fannie Mar REOs are going to be cash only transactions due to property condition... But many of your price range will be eligible for FHA.
Updated over 5 years ago
Only o/o during first 20 days on market