Philadelphia, PA · Member since 2017 · 32 posts · 4 votes
Hi everyone, I am planning to buy a Hud Home and wanting to flip it. I came across the idea while watching Biggerpockets videos. However, I do not know anything about purchasing a Hud home and how I should go about it. I do know that currently it is exclusive to only Owner-occupant,government, and etc. Therefore, investor are not able to bid on it. My worry is that I do not know exactly know how much I should bid on the property. I was doing some research and it seems that there is no negotiation, just that the highest bidder win. Although the bid has no time limit and you do not know how much someone else bid. My other worry is that, i am not sure if we are allowed to go see and tour the house before bidding... I will also like to know how long does it take usually for a respond back on the bid. Any advice would be appreciated, Thank you!
That is inaccurate. As I outlined above, the threshold for automatic acceptance is 88% net to HUD. A lower offer might be considered at some point, usually after 45-60 days of the market
Rental Property Investor · Steamboat Springs, CO · Member since 2017 · 255 posts · 154 votes
6y
I'd recommend finding a local agent to work with that has experience dealing with government foreclosures/auctions, that can help guide you through the process. Things like max bids, waiting periods, inspection opportunities, etc. vary widely.
Don't worry about what other people are bidding or what HUD will respond with. Figure out how much you have to pay for it to make sense as a flip, then bid up to your max amount (and no higher). If they say yes, great. If they don't, on to the next one.
As a very general rule of thumb, HUD auctions in my area typically sell for a minimum of 88% of list price.
Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
6y
Hud offers no preference to cash vs financing in the owner occupant period. The highest net to HUD bid wins, even if it is $1 more. A few things to keep in mind:
-You will need to use an agent that has a HUD NAID #. Be sure to get an agent and closing company with HUD experience as they have deadlines that are not flexible
-The lowest bid that will be automatically accepted is 88% net to HUD
-Once the property enters the Extended period, bids are opened daily M-F and your agent will know if the bid is accepted by mid-morning the next day
Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
6y
Hi Edward! I'm in the process of learning about HUD homes myself. From what I've seen, and from what I've gathered here on the forums, HUD won't accept an offer below list price. They'll let it sit for a pre-determined period of time before lowering the price.
That is inaccurate. As I outlined above, the threshold for automatic acceptance is 88% net to HUD. A lower offer might be considered at some point, usually after 45-60 days of the market
Philadelphia, PA · Member since 2017 · 32 posts · 4 votes
6y
Thanks for the help everyone! All the response and information given is very helpful! After looking at some of the comp... I decided i might not be getting the house. I am trying to start off into flipping houses, but having a hard time trying to decide where I want to start... (location wise)