My husband and I are looking at our second rental property, a 3/2. It is currently being offered through HUD for $75000. The bidding for non-O/O starts this weekend. It was foreclosed a year ago at $103k and has gone under contract at least twice. Those contracts were cancelled due to "too much work".
There is termite damage in the house. It would need new flooring, doors, some windows, drywall and trimwork. However, HVAC looks to be in good condition, roof as well. Good neighborhood in North Charleston near Charleston Southern University. We would plan to rent, with comparable rents in neigborhood starting at $1100. Comparable homes in the area are selling for $125k to $150k.
Our lender is offering us a portfolio loan, 20 year, 5% interest, and we could wrap our repair cost into that mortgage, estimating $20 to $25k in repairs, most we would do ourselves.
Does anyone have any suggestions for the HUD bidding process? We were thinking of going in with with an offer of $69k, with no closing fees included. However, with several previous offers following through, and being new to this, we weren't sure. Any thoughts?
Hey @Amy Bates . I know which property you're talking about. I'm actually helping another guy look at it. The financing sounds good. That's a pretty sweet little loan that they're offering you. The HUD bidding process is off. You have to have a broker that is registered with HUD to place bids. They need to have an NAID number in order to make bids. It's not a traditional bidding process. I'd love to help you with it, but I'm going to be helping another gentleman with the same property.
@Troy Gandee , thanks for the insight. I figured it would be a hot property, since the price keeps dropping. All the best to him as well and we'll see what happens. Take care!
@Amy Bates the HUD process is automated and algorithm driven. Do a search on BP to see what they are likely to accept.
Generally the NET value they will accept in the first week is 85-88% of the current listing price.
Hud only looks at the net bottom line after all commissions are paid cash or financing has no bearing If the property is a good as you say and investor bids are welcomed it is likely that you will have many competitive bid Why no got 2- 3 over list price if it is worth it ?
Thank you everyone for your insights! Found out today they went with another offer, but hey, at least it's a start. Thanks again.
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