This is a HUD house and I just learned my bid was accepted this morning. I haven't actually closed on the house yet.

How did I find it?  This house actually came up on my daily search of new listings and price drops, but it didn't look super compelling so I didn't pursue it.  However, a wholesaler I've worked with told me about it, told me they countered at very low-ball bid at a price I would be willing to pay.  And he told me the house was in great shape, something not immediately clear from the listing.

I went to the house with the wholesaler and the realtor he works with. She told me the exact price HUD last countered at. (HUD accepts bids online daily and sometimes counters those bids.)

How much am I buying it for and how am I fninancing it? $60K, 25% down, financed through a local credit union that does portfolio loans (they keep there mortgages instead of selling them off) and lends to investors.  15yr loan, probably at around 4.5%.

About the house.  This is a 3bd/1.5ba, 1400sqft house with attached single garage (which is carpeted and was used as a family room or bedroom).  The bid was $60K.  The house is assessed at $96K.  However, realistically, it is worth about $80K in current condition.

What condition is it in?  Below are some pics.  This house needs very little.  Paint and carpet, as they say.  Its in very good rental condition.

What repairs will I make? The paint and floors and cabinets and everything are in good enough shape that I won't do anything besides clean them. I'll power wash the mold of the siding, put in some light bulbs, have the electric and gas and plumbing turned on (HUD winterizes houses) and get a Certificate of Occupancy inspection. I should also look at trimming or taking down a couple of pine trees the drop sap and debris onto the roof. And I'll have it cleaned.

What will I rent it for and how well will it cash flow? One of the nice things about this property is it will likely be rented out within two or three weeks of closing. Probably at $1,100/mo, possibly $1,200/mo. My PITI (principal, interest, taxes, and insurance) expenses will be about $700/mo (our taxes are very high), so, not including maintenance, management and vacancy, it will cash flow between $400 and $500 per month. I self-manage, so if you take of 20% ($220/mo or $240/mo) for maintenance and it will cash flow at $180 to $260 per month. However, I feel I am estimating on the high side, so hopefully it will be better than that. Also, I like to rent-to-owns, so my vacancy is very low and they are responsible for small repairs, so my repairs are low too.

Would this be a success story for other investors?  No.  I happen to know the price would have had to be about $55K for other investors.  And it wouldn't be cash flowing well enough for them.  But for me, it works.  It cash flows well enough.  I am getting a nice house in a nice neighborhood.  I'm getting it with $20K equity built in.  I could put $10K into it and flip it $90K but I am trying to build up my buy-and-hold portfolio.