Should I Do This?
Hi,
I'm considering buying a HUD house. Its a single family home with 3 bed/2 bath, but its been on the market for at least 6 months now, and is reported as having mold and water damage. The asking price is 260, and I'm considering making a bid of 210. Comparable houses in the area sell for around 280...
Should I buy this place, fix it up, and resell it? I have about 25k in cash, and I'm pretty sure that will be enough to cover all the repairs. I've also been told that there is a 1 property per year limit on buying HUD houses, is this true?
Any advice would be appreciated.
-Joe
Talk to a HUD real estate agent in your area. You will have to work with one anyway to make a bid.
I am sure there is not a limit as to the number you can purchase. There are guidelines for investor or owner occupied properties. And I beleive that there is a maximum discount that HUD will take - meaning that there is a limit on the lowest offer they will except.
I bought four properties from HUD last year. I am closing on number for 2004 on 01/28/2004. There was a time limit on how long HUD had to allow for owner-occupied bids. But no one wanted any of them to live in. Especially in the shape they were in.
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Anyone know what that minimum % is that HUD will take?
This property open to all buyers, not limited to owner-occupied like others, so it makes it easier, I would assume.
when it comes to HUD there are a lot of variables. At times there seems to be a rhyme or reason for what they do and what their homes go for and at other times there isn't. I don't believe their is a "pre-determined" price set for each house before it goes on the market.
With that said HUD homes can be great investments they can also be nightmares.
Q
Why not appeal to their reason?
Get a good expensive bid from a contractor to rehab the mold and water damage and anything else that is needed to make the property saleable or able to qualify for conventional financing etc.
Then deduct that from the asking price and add cushion and profit for yourself.
By the time you replace sheetrock and studs and have the air treated by ionization and hepa filtration through one of those mold disaster companies you will be discounting tens of thousands. ANd then you can go in and do the work yourself.
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Do you, or anyone, have any more information regarding what is involved in mold damage repair? And possibly some good companies in MD that do this?
Is it really possible to do this yourself? aren't there lots of regulations to worry about?
Thanks.
-Joe
From the properties that I've watched over the last 3 years thru HUD (in my area), especially as of late, the lowest accepted offers have been around 89-90% of the asking price. Maryland is a tough market.
It appears as if I'm going to get this property at 90% of the asking price. The difference between the purchase price and its FMV after repairs is about 30k. Does this sound like a good idea?
30K after repairs seems to be a fair profit but remember to factor in the time it will take to sell it (every month you make a payment decreases your profit), how fast are homes moving in your area? costs of selling it, and your time spent. Make sure the cushion is big enough to make it work. Not saying it isn't worth it but make sure to estimate on the "high" sides for repair costs and time to sell so that your profit sceneriois on the low side. If you save on costs then the profits are greater and you are happier. I never like to be disappointed with profits at the end of a project. Would rather aim low and out do myself.
Good luck,
Q
P.S. I'd love to be your real estate agent helping you put together your bid...HUD pays a nice 5% [ Edited by RunningQ on Date 01/30/2004 ]
Quote:
On 2004-01-26 13:46, antkojm1 wrote:
Anyone know what that minimum % is that HUD will take?
The minimum percentage is 87% so on this property offer no less than $226, 200
Cheers
Josh
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