I looked at a house that is being sold by a "bidding" process. I sent my real-estate agent my offer. After filling out some info, he found out it was unavailable to investors. I know many of you have come across this before, but please let me know how this has worked with your experiences. Is there any way around this? What is the reasoning? Do they not want you to flip? I would be doing a small rehab and renting the house out. Have you found that after the initial bid, they change it to allow investors? Any input is appreciated.
my mistake in placing this in the commercial real estate forum. I am working on fixing this, but if i don't, please know i am inquiring about a residential HUD home. thank you.
@John W. the last HUD house I picked up went through the same process you're describing. The house went under contract within 10 days and before investors could put in offers. Ultimately the property came back on the market after the owner occupant deadline had expired and I was able to get in a full price offer to win the bid.
I've seen a lot of HUD deals in our area come back on the market after they've gone under contract. Treat is as a numbers game and you'll be able to get a couple.
Hud homes typically go up in a "lottery" bid period where only non profits and government agencies can bid on it for 7-10 days. Then there is roughly 30 days after that owner occupied buyers are also allowed to purchase, this is called the "exclusive" bid stage. Then after that it opens to all buyers including investors, this is called the "extended" bid stage.
Seeing as though your not going to live in it, you will need to wait until it goes to all bidders. I do know quite a few of the good properties are gone before they make it to that point and I have heard of investors cheating and buying during the owner occupant period, to me it wouldnt be worth the risk because if they catch you, its huge fines and issues.
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