HUD Property Offer/Process

[Logan Hassinger]

I have recently walked a duplex owned by HUD. The HUD inspection has been reviewed with no major issues found. What was found is that one of the unit's furnace isn't functioning, and that the kitchen sink has an obvious leak. The A/C unit looks to be serviceable but could be possibly replaced. I have factored in the cost of replacing the furnace in my rehab budget. Both units will need flooring throughout, which will be carpet in living room and both bedrooms. The kitchen and bathroom will receive vinyl flooring. Both units need minor drywall repair and new paint through out. All lighting fixtures will need to be replaced as well. Both bathrooms will need to be remodeled to the extent of replacing shower/bath area, faucets, sink and resurfacing cabinets. The kitchen will need new laminate counter tops, cabinets resurfaced, and appliances (stove/oven, and dishwasher).

The property is listed for 70k and I would like to offer somewhere in the neighborhood of 50k. The ARV in this community of duplexes is 105K. When submitting my offer, should it contain the list of repairs and estimated costs, which currently sits at a very rough, high estimate of 20k? Can anyone provide additional detail as to my rehab estimate?.

I'm looking to finance the deal with hard money and pay for rehab out of pocket, then refi at 8/12 months later.  This is a long term hold. Does anyone see any issues with this strategy?