Updated over 13 years ago on . Most recent reply
HUD sales
There seems to be some negative comments about HUD purchases for REIs on the Forums ("leave them to the newbies" for example). Why? I am reading about the different methods and definitely am interested them and marketing to find deals. HUD listings, however, do seem to be extremely low and competitive in the Atlanta market. I have a construction/industry background and am capable of spotting issues on a home without the utilities on. What are the major drawbacks? Set me straight with the problems. Thanks.
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I've bought four of them, and with the exception of one closing which was delayed by their closing agent (and for which I was later reimbursed) that I had to cough up a couple hundred extra, I've not had any problems. I'm sure it is a market to market issue but I've been able to purchase significantly below list price.
Probably the biggest obstacle is that you have to wait 30 days before you can bid when you are buying NOO. Sometimes that means what's left after 30 days isn't all that great in the first place.
The other issue is that your EMD is non refundable if you have to back out of the deal for reasons outside of HUD's control. The way I've gotten around that is to do my inspection immediately once the contract is accepted but before you send in the signed copies with the EMD. If I don't like it, then I don't send in the contract and the property goes right back on the market.