the answer is technically yes you can. However, you generally can't do a double close, because of restrictions on how long you have to hold the property. You can assign a contract on a HUD property, but you have to get written permission from the HUD manager responsible for the property.
Here's the thing, you will not be able to wholesale a HUD property, until after you complete the sames contract, because their simply isn't enough time. Therefore, you will have to be able to put up the EMD and submit a preapproval letter. You will also have to be able to either take the deal down yourself or ve willing to lose the EMD, if you can't get approval to assign the contract. You could possibly mitigate that risk by reaching out to the HUD manager (contact info is in the HUD disclosure forms) and talking to them in advance about their willingness to allow assignments of the contract.
So, yes you can, but you really need to know what you're doing, and I wouldn't recommend it, if you don't have some cash reserves.
There are no restrictions on how long you have to hold a HUD property that was contacted as an investor
Which Asset Manager were you able to get to allow an assignment and removal of your name on a HUD contract ?
Greg...you are correct. There isn't a restriction by HUD on how long you have to hold the property. I was actually mixing 2 issues, since there is a 90-day hold rule for the resell, if the end buyer is using an FHA loan. However, that is an issue on the seller financing side, not on the investor who purchased the property from HUD. Sorry for the confusion.
As for which Asset Manager, I never said I got permission from one to assign a contract. I said, technically it is allowable, but you have to receive written permission. I would not personally recommend attempting to wholesale a HUD home, since most wholesalers don't have the capacity to take the deal down themselves.
Inorder to bid on HUD properties you need a realtor and proof of funds. As an investor you can bid on properties when they are offered to investors. You can wholesale HUD properties. Check with a local realtor and let them guide you through the process. Some properties have deed restrictions and each state vary when it comes to flip rules.
Texas is a Deed state. Maryland is a Lien state the laws are different.
Missouri is also a Lien state so it is different than Texas.
@Ronnie Wilson Whether a state is a "title theory" or a "lien theory" state, it has nothing to do with wholesaling/double closing a HUD property.
Title theory and lien theory statees have different laws impacting financing, foreclosed, REO and HUD properties. Wholesaling or double closing a HUD property in Florida is different than here in Maryland and it is different in Texas.
HUD is federal all 50 states does not depend on local customs
- Purchased the property outright, held it, then sold it- Not optimum because of closing costs but if purchased @ a deep enough discount it works
- Put the property under contract in an LLC, then sold the LLC- Again not optimum because of costs to establish an LLC & the subsequent paperwork. We stopped doing this years ago.
- Put the property under contract in a Land Trust, then sold it thru change of the Land Trust beneficiary. We've found this to work the best. Only potential issue is if the end buyer either doesn't understand Land Trust or is working w/ a lender that has a problem w/ Land Trusts.
Thanks everyone for the responses. Much to consider and investigate.