Buying my first flip property!

Buying & Selling Real Estate
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Buying my first flip property!

Robert Obniski
Investor · Madison, WI · Member since 2015 · 128 posts · 33 votes

As of right now, the seller and myself have an agreement on price and hopefully he sends over the contract tomorrow.

This is a HUD property being wholesaled to me.

I wont be using an agent this time so i'm taking any referrals for a real estate attorney, Preferably one that has dealt with HUD properties.

One thing that is worrying me is that the home has a in ground pool out back but theres snow all over and no way to inspect it. Any thoughts on how I can inspect the pool during winter?

I'll be updating this thread as this all unfolds. 

Oh, and this is in the Chicago land area

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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    11y

    Make sure to check out the pool during your inspection period.  You can either take off the cover or pay a pool company to stop by and see it.  Not sure if they can operate the equipment in low temps like you are having. 

    Good luck

    Curt Davis - KAIZEN Realty538 Reviews
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  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    11y

    @Curt Davis 

    @Robert Obniski 

    Curt- I think you missed the part where he is buying a wholesaled HUD home so if the original person who won the HUD bid is passed the 15 day period he will not be able to inspect the pool or any systems(except visually) and if going by the letter of HUD rules shouldn't be at the property at all except with the wholesaler's agent present

    Robert-  How is title being conveyed to you ? Double close ?  Be careful and make sure you get a title policy as there are some potential pitfalls

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  • Lumi Ispas
    Real Estate Consultant · Chicago, IL · Member since 2014 · 720 posts · 439 votes
    11y

    @Robert Obniski 

    HUD has restrictions on deed, meaning that you can't resell the property for a minimum of 3 months after buying it. How is this whole seller conveying the title to you?

    Regarding the pool, consider rebuilding a new one. A pool that was left with water in it for a long time has the filtered destroyed. Also, after freezing, all the mechanical are dead. 

    99% the pool needs new mechanicals and has to be rebuilt!

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  • Robert Obniski
    OP
    Investor · Madison, WI · Member since 2015 · 128 posts · 33 votes
    11y

    @Greg H. I am not sure how this is going through. As far as I know, we have a agreement on price and he just sent the contract over so I will check that out. As far as the '15' day rule, I wasnt aware of that. 

    Any resources for finding out some more about buying HUD foreclosed properties?

    @Lumi Ispas 3 months? Is that a for sure-set in stone type of restriction on all HUD homes? I wasnt aware of it/ Also can a home be under contract before 3 mo and have a closing date of 3 months and 1 day?

    Anything I should know or an attorney should no before I go through with this?

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  • Lumi Ispas
    Real Estate Consultant · Chicago, IL · Member since 2014 · 720 posts · 439 votes
    11y

    @Robert Obniski HUD has one of the most complex process when selling their REO properties. As a new investor, if you ever plan to bid on HUD, and you'll need an agent to bid for you, HUD doesn't allow buyers to bid on their own, you have to wait for the investor period to start bidding. If you ever bid in the first few weeks when the site is open only for the owner occupants and buy the property until false pretenses, HUD could fine of $250,000 if caught.

    First make sure the property that the whole-seller is selling you is closed and it was not purchased as owner occupant. 

    Then ask him to check the contract for the deed restrictions. If it's 3 months, it means that it has to be 3 months and 1 day from closing to closing.

    Hope this helps!

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  • Account Closed
    Toronto, Ontario · Member since 2015 · 11 posts · 0 votes
    11y
    Exciting time for you and congrats! Be cautious of flips with pools. Margins can be tight and a pool can be devastating to a flip. Keep your eyes on every penny and should be fine. As a rule I avoid homes with pools but thats my personal preference. Have fun and enjoy the process!
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  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    11y

    @Lumi Ispas 

    There are no restrictions on reselling HUD homes bought in the investor period. You can resell at any time

    @Robert Obniski 

    I assume you are paying cash ?  Be careful....in fact get some good advise from someone on the agreement to purchase . Let me know if I can help

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  • Robert Obniski
    OP
    Investor · Madison, WI · Member since 2015 · 128 posts · 33 votes
    11y

    @Greg H. Ok great, I will pm you if I have any questions.

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