How much should I offer on HUD home?

[Sharad M.]

Hello all,

I have been following this HUD home for last couple of weeks. I plan to flip this property. It was originally listed for $55k. After I ran my numbers, I calculated my maximum purchase price of $42k. This property was taken off HUD website for a price reduction and it just came back on the market at $40k, below the maximum I was willing to pay for it.

I was talking to my agent and he said that HUD usually accepts bids at 80% of the asking price, so he said we can go in at $34k, just a little over 80%. I like this property, it has great potential. I am confused as to how much to offer on this one. Should I go in at $34-35k or just make an offer at asking price to be on the safe side?

ARV for this property is $110k (this is very conservative number). A 3/1 rehabbed house sold couple of blocks from this one (in the same subdivision) for $125k and it didn't include any appliances. The HUD house I am interested in is 3/1.75 plus has a 3 season bonus room in the back. It needs $30k in rehab work. What do you guys think?

[Mark Yuschak]

Only HUD will see your bid. The listing agent never sees the bid until it has been accepted.