HUD Wholesale Bidding Strategy

[Haider Zaman]

BP Family,

I have a question regarding bidding on HUD properties. What percentage of the listed price (or ARV, whichever) are your bids on the HUD site?

I understand that this is a very generic question (considering property values are different all over the country), but my bids have usually been around 11-30% of the listed price and I haven't had any success.  Speaking in generalities, what % have you all had the most success with?

Any pearls of wisdom you all could share would really go a long way in helping me secure my first deal!

Thank you!

Haider

[David Krulac]

@Mark Ferguson 

is an expert in HUD properties, when he speaks/writes, everybody should be listening.

I keep track of the HUD properties that we bid, as well as selected other HUD properties that interest us. For the last 16 HUD properties that we actually won the bid, the high bid percentage of net were:

56%

85%

70%

80%

70%

85%

70%

79%

71%

87%

60%

93%

70%

70%

93%

68%

That averages out to about 75%. Of the 16 HUD purchases 13 are held for rentals. And of the 3 sold 2 were condos that restricted rentals. All 3 sold needed painted, but only 1 of the 3 needed carpeting. The purchase prices were: $38,000, $78,000, & $62,000. The sale prices were: $60,000, $125,000, & $109,000, and the last sales prices before HUD were: $70,000, $137,000, & $120,000. So in each case I sold the rehabbed properties for less than their peak price.