First Hud bid

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First Hud bid

Zach Ward
Investor · West Monroe, LA · Member since 2015 · 34 posts · 7 votes

Ive got a few properties under my belt but recently bid on my first HUD...haven't done much home work on HUDs so a little anxious on what to expect.

Looking at assessors website it looks like It "sold" or "refi'd" for over 70k in 2014

looking now like on market for 100 days and price has been dropped from approx. 65k down to 55.3k in 4-5k increments with most recent being a 59k to 55.3k drop last week.

I wanted to bid in 40s but apparently there are two other offers being submitted the very day I contacted my realtor so I'm bidding 52,500.00. With my inspection/visit it's almost turn key and I believe with cash flow around $200 plus a months. My main concern is what can I expect from bank since I'm use to dealing with owner occupied homes? Thanks for any input.

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Jason Hirko
Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
10y

hudhomestore.com is the official government website with all the listings. Don't Look anywhere else

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  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    10y

    A few thoughts :

    The property has been on the market for a while so it is a daily bidder. There is no way of boing how many bids will be placed in the property that or any day.  Even the listing agent does not know

    Keep in mind it is more difficult to get a loan in a HUD home for the simple fact it is difficult to get all the utilites on for the appraiser and in some cases HUD will not let the utilites be turn on at all. Consult the PCR and the other addendum for disclosure about utilites. Make sure your lender is versed with HUD homes as your earnest money is not refundable.

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  • Zach Ward
    OP
    Investor · West Monroe, LA · Member since 2015 · 34 posts · 7 votes
    10y

    Thanks. Am using a local credit union that holds three of my 4 properties already with over 30% equity in those loans and looking to just roll it in one 5/20 balloon. They have been pretty flexible with me since I'm a full time RN with 800 score plus minimal debt... wish me luck on that one. Good to know about utils... didn't know that but makes since. What is a "daily bidder"? Still learning a lot of the lingo. Thanks

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  • Jason Hirko
    Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
    10y

    @Zach Ward What @Greg H. is saying is that the bid closes daily since the property is out of the Exclusive period for owner occupants. If the bids were submitted yesterday, they will have already taken the highest bid (if either of them are above their minimum threshold). Based on what you're saying, the minimum threshold is now $47,005. If you put in a bid above that, you'll just have to be higher than anyone else bidding today.

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  • Zach Ward
    OP
    Investor · West Monroe, LA · Member since 2015 · 34 posts · 7 votes
    10y

    Ok, making since now. I familiarized myself with the 89%-88% rule last night in hind site. So I felt a little better about my bid due to property not being very distressed and I feel comfortable with a 20% or better return plus at least a decent cash flow. Thanks for the input. Good learning experience either way this goes! Do they disclose if it's a "daily bidder"?

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  • Christopher B.
    Broker/Investor · New York, NY · Member since 2016 · 51 posts · 14 votes
    10y

    A "daily bidder" is one who bids daily on the same property in hope to win the bid.  Not everybody stays on top of the game and as a result end up missing out and losing the bid to those who do bid daily. 

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  • Jason Hirko
    Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
    10y
    Originally posted by @Zach Ward:

    Ok, making since now. I familiarized myself with the 89%-88% rule last night in hind site. So I felt a little better about my bid due to property not being very distressed and I feel comfortable with a 20% or better return plus at least a decent cash flow. Thanks for the input. Good learning experience either way this goes! Do they disclose if it's a "daily bidder"?

     Every house that goes to the extended period closes bids daily. Look at the bid closing date. It will be today at 11:59 pm. For the exclusive listings, the bidding ends several days after it's posted. That's all it means - they don't keep it secret.

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  • Zach Ward
    OP
    Investor · West Monroe, LA · Member since 2015 · 34 posts · 7 votes
    10y

    @Jason Hirko I found this property on REMAX. Is there a resource/hud website that list these types of specifics? I've more or less just used my realtor for further info.

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  • Jason Hirko
    Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
    10y

    hudhomestore.com is the official government website with all the listings. Don't Look anywhere else

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  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    10y

    @Zach Ward

    A quick glance on hudhomestore.com does not show a property in Louisiana at that price. So, it may be that it is already under contract or it is a HUD property that was a reverse mortgage that was foreclosed in. If it was a reverse mortgage, anything we have said here does not apply. meaning it wont be on Hudhomestore, the property must be sold for list price for 180 days and bids are not placed online. Have your agent clarify

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