understanding HUD process

[Vicky S.]

I was just checking on HUD listings around my neighborhood and saw something that i liked. I did some BP search and understand that you can have a HUD home for as low as 60% of the price. I was more interested in knowing the process involved? is it similar to a conventional real estate transaction?

also can i wholesale a HUD home? how accurate are the reports that are attached along with HUD listings? do i need to have it inspected separately?

i know these are a lot of questions but any guidance is highly appreciated. 

thx. 

[Jon Holdman]

The process is very similar to any other purchase. You must use specific agents that are authorized to submit HUD offers. Unless you're planning on moving in, do not bid during the owner occupant period. Wait until the investor bid period. If you do bid as an investor, get your bid accepted and give them earnest money it is VERY, VERY unlikely you will ever get that earnest money back. You don't have to close on the property, but you're not getting your EM back. If you're bidding as an investor and you want to do inspections, do them before making a bid. HUD will not renegitiate after the offer is inspected. If you don't like what you find in an inspection after you get an accepted bid, tough. You cannot back out based on an inspection contingency, as you can usually do on a regular purchase.

The inspection reports are about as accurate as any other inspection.  Which is to say they give you some info, but may have missed something.  They are in no way any sort of guarantee about anything.

I think 60% is far too low.  IDK what the number is, but its not nearly that low.

I've seen these wholesaled by making offers in the name of an LLC, then selling the LLC to your end buyer.