HUD Houses Any experience?

[Sergiu Spinu]

Hello,

Anybody has bought HUD Houses????

What's the pro and cons

It's possible to buy(HUD) flip and sell????

Thank you

[J Scott]

The pros:

- You can see all the listing information yourself without the help of an agent (www.hudhomestore.com).

- The negotiation process is simple (you put in an offer and they either accept, reject or suggest a higher price).

- It's generally pretty easy to determine how much HUD will take for a property given how long it's been listed and the list price (they have specific formulas and there is no subjectivity in which offer is selected).

- The closings can be pretty fast if there are no title issues (2-3 weeks).

The cons:

- There is no due diligence period for investors where you can get your earnest money back (if you back out, you lose your money).

- You can't assign the contract.

- You need to have an agent place the bid for you.

- Owner occupants have first access to properties (for 30 days), so the best deal will be gone before you have access to them.

In terms of whether you can "flip and sell," it really depends on what you mean by "flip"? You can certainly take possession of the property (close with your own funds) and then resell immediately for any profit. But, if you're trying to close without using your own funds, it's a bit more difficult

There are two reasons for this:

1. You can't assign the contract.

2. You can't double-close with the HUD closing attorney (at least the attorney in my area refuses to double close HUD transactions).

But, if you're willing to take possession of the property (either with your own or borrowed funds), you can certainly resell through another attorney as quickly as you can get whatever your end-buyer needs (clear title, title insurance, etc).

And there's no reason you can't purchase through a business entity and then sell your interest in the entity as soon as you close.