Buying a HUD Home to Flip

[Chris Bardin]

Are HUD home forclosures typically good options for flippers? I understand the earnest money is non refundable on uninsured properties, but is there anything else to consider? Is the HUD process a pain? Doing research on some of these properties they appear to be good prospects sometimes.

Will they accept low ball bids compared to asking price?

[Mark Yuschak]

My experiences with HUDs echo what Rob K has said.

I've literally bought dozens of HUDs (just closed on one Friday, as a matter of fact). The deals aren't as good as they used to be. 2009 and 2010 were awesome years for picking up HUDs. It seems that ever since the bidding is now all done on hudhomestore.com, the deals aren't as prevalent. I also picked a few sweet deals when they used to advertise their highly distressed properties with a red box around them, and the label "ALL BIDS WILL BE CONSIDERED ON THIS PROPERTY". Those were the good old days!

I also agree that getting title insurance is a must. I won't close a HUD without first reviewing a commitment, then buying the policy if I close the transaction.

The best way to catch a good deal on a HUD these days is just like anything else... the higher the DOM, the better likelihood you have of getting your low ball bid accepted.

And, one point of clarification from your original post, it doesn't matter if the house is UN, IE, or IN. If you're bidding on it as an investor, the EMD is non-refundable, no matter what. The condition of the property has nothing to do with potentially getting the EMD refunded.