Can HUD dictate eligibility of buyer?

Question

Hi All,

I am a total newbie at real-estate investing. I am looking to get my first deal. Trying to buy from HUD auction; and I heard that HUD requires investors to have 5 years of property management experience if they are trying to buy a rental property vs. Owner occupied. My agent thinks it is not true.

So, I am wondering, if anyone here can verify if HUD does this and if I can use property management company to show for that experience.

Thanks in advance

--Tejas.

Jon Holdman · Answer

You have to have an agent to make a bid on a HUD property.  @Mark  Ferguson is an expert in this area.  You also need to wait for the investor bid period, if you're not going to live in the house.  Also keep in mind that if you get a winning bid and hand over your earnest money, YOU WILL NOT GET IT BACK.  Do any inspections before making the offer, because there are no inspection contingencies on a HUD property.  Don't take the property condition report as gospel, either.

Tejas Kotecha · Answer

@Frankie Woods  The way I understand it; you have to have an agent to bid on HUD homes; you can't do solo.

They do seem like good deals; but thats the beauty of auction right?

Mark Ferguson · Answer

Exactly.

Frankie Woods · Answer

Do you need to have a real estate agent versed in Hud homes in order to purchase or can you do it solo, even without a license?  I'm really interested in picking up some of these deals.  In the several that I've looked at recently, they seem to be amazing deals!

Tejas Kotecha · Answer

From my understanding, it was single company owning multiple SFR and got 811 for them. All SFRs are getting auctioned off. It is from Info kit from one of the SFRs.

Wayne Brooks · Answer

HUD 811 is subsidized housing for people with disabilities, etc. and for multifamily as far as I knew.  Odd it would be on a SFR I think.  This may be a "special circumstance" property, unless you read about it somewhere else and are mistakenly applying it to this property?

Tejas Kotecha · Answer

@Mark  Ferguson @Chris K. @Peter Nguyen

I heard it from my partner researching this deal and now, I dig through Information and bidding kit they provided on hud portal and in the kit they explained this as part of post purchase procedure.

The property I am looking at is a single family. In my understanding they got financing under HUD 811 and now HUD is auctioning the homes.

There is one more line in Info Kit; mentioning "20 Year affordable housing restriction", I am wondering what does that mean for me.

Appreciate the help and Thanks again

--Tejas.

Chris K. · Answer

There is absolutely no truth to that and I'm curious where you heard that from.

Mark Ferguson · Answer

I am not sure where you heard that but it is not true.

Can HUD dictate eligibility of buyer?

Most Popular Reply