Wholesaling HUD Homes
Hi,
Ive been looking into all different ways and options to get into Real Estate from REO's, to short sales, and so on and now I've come across HUD homes and so far it's sounding pretty good, but Im new at this, so I want to run a few questions past you guys and gals. So first off, being a previous FHA loaned home, I shouldnt have to worry to much about major surprises like other homes, right? I mean, from what I've heard, FHA is pretty strict on major things not being an issue with a home they finance... So Im thinking that sounds like a relief to not have to stress that my contractor will uncover a costly issue when Im just getting into this business and every $ counts... From the information I just got off of another webinar, as long as you buy the home from HUD and they are aware you are an investor, there are no resale time limitations on thee homes? The webinar also stated that if you win a bid, you have so many days to turn in the paperwork to get the deal done, so in that time, he looks for his end buyer, and if he doesn't find one, then he doesn't submit the paperwork and the deal is off, no penalty... ? This is all sounding to good to be true? What am I missing? What are the negatives?
But really, how does this process all work...(Assuming this info was all true)
I bid. If my bid wins, HUD sends me paperwork. Before that paperwork deadline is reached, I am finding an end buyer. I then submit the paperwork. Take out transactional funding? Do a double close with my end buyer and walk away with my money?
The thing Im having the hardest time understanding is earnest money deposits... If I put up $ for a deposit for my contract, take out transactional funding to purchase the home, and my end buyer backs out, what do you do??? Or is there something he signs so that he can't? How does that part work?