Wholesale on a HUD home

[Pamela Holmes]

There is a HUD home for sale in a C area neighborhood. All brick, 4/2 1235 sq ft. for $41k; The ARV is $105k. The scenario is I want to wholesale this deal, but HUD is saying I have to close the property in my name, but I can sale it once I close.

How can this be done with an end buyer? I really don't want to use financing for this deal.

[Ted Akers]

@Pamela Holmes 

HUD deals are not assignable so you have to close in the name you made the offer in. Your own funds, hard money, or transactional funding will be necessary. For transactional funders it is typically required that you use the same title company for both your purchase and your sale to the end-buyer. Many HUD appointed closing agents will not want to handle both transactions, but you do want to tactfully ask them such as: "I am considering reselling this property, would you like to handle both my purchase and resale?" If they say yes, tell them that if you do you plan on selling on the same day, but would separately fund your purchase and the end-buyer will fund their purchase. Make sure they are clear you are not trying to use the end-buyers funds to close on your purchase or they will say no quickly. If they do not want to close both transactions I have funded "split escrows" where the second transaction closes at another attorney's office, since Georgia I an attorney state. This takes some coordination on your part as transactional funders will require your end-buyers funds and executed closing documents be in possession of the closing attorney before funding the purchase, but it is not really different than the coordination required for wholesale deals. I hope this helps.