Bidding on HUD Foreclosures

[Flue Hasipi]

An investor shared about getting a great deal on a HUD foreclosure- we’re talking 50% less than already reduced price. It was a CASH deal and just around this time,before end of calendar year. He thought HUD was motivated to let go of it in attempt the cut losses and not carry it on the books for the new year. Whatever the motivation he scored a great deal. What is your experience regarding HUD properties?

[Greg H.]

85-90% of my inventory over the last 28 years flipping houses has been HUD properties. While the systems has changed dozens of times, if you understand the system it is very simple and straightforward. There are no preferences, no broker manipilation(they have no idea the number or amount of the offers until one is accepted). A few tips:

1. ONLY work with brokers, lenders and title companies that are familiar with the process and I mean well familiar. HUD changes the rules for no one as it is their way or the highway

2. The only offer that will be automatically accepted is 88% net to HUD of the current list price

3. Lower offers might be accepted at some point. There used to be automatic price reductions and a precise number that would be accepted at that point. However, that is not the case currently. Any online guru or seminar that tells you "how to buy HUD homes for pennies on the dollar" is full of %%$%^&**" I have purchased many a HUD over the years at 8-20% of original list price but like I said it is not happening now

3. Cash or financing means ZERO on Hud properties. Highest net to HUD wins(even by $1) and there is no highest and best or counters. If your bid is not acceptable , your will receive what HUD calls a Counter offer, but it is just an invitation to re bid and is not binding