Found my first deal...lost my first deal!!!! :- - Posted by Ana FL

Real Estate Investing
#1

Posted by David on December 23, 1999 at 12:46:55:

I hope the system does change also for the better. It used to be that they moved the inventory. The list prices were low and foten were overbid sometimes significantly like 50 to 100%.

I’m not sure how the service companies are compensated,I have a feeling that it is not commission
on units sold but rather on numbers managed per month. Again that would not incentivize to sell inventory. In the East the company handling HUD this year already went belly up and we’re on our second company. Happy Holidays and New Year.
David

#2

Found my first deal…lost my first deal!!! :- - Posted by Ana FL

Posted by Ana FL on December 22, 1999 at 09:43:53:

Yesterday I was ready to purchase a property from HUD for $66K. I did all my research and drove by and analized it. I called my realtor to have her place my bid. She was surprised this home was selling so low, being that it only had minor damage and it was only 2 years old! Plus the market value for a similar home is $85,000!!! I figure I would have made (after minor cosmetic work)about $15,000!!! Well, anyways, I called too late. Someone placed a bid ($66K)and got accepted about an hour before I called!! There might be some hope, they’re not closing til March 29th! They might change there mind, right? Oh well, it would have been a nice 1st deal. Thank you for listening.

Depressed in Orlando,
Ana

#3

Don’t give up on HUDs - yet. - Posted by Irwin

Posted by Irwin on December 22, 1999 at 21:34:57:

I too used to buy HUDs and still make offers. What has happened is that someone sold HUD on the idea of listing their properties privately, through realtors using the MLS system, and selling them as close to retail as possible. That’s why we’re seeing ridiculously high prices on HUD repos nationwide, and bids of 90% of asking being declined regularly. We’re also seeing that HUD’s selling agents are not selling nearly as many as are coming in from foreclosure.
Simply stated, the homes are not in the kind of condition, or location, they need to be in to command the higher prices. IMHO, sooner or later, the pipeline is going to become so clogged with unsold properties that something will give, and when that happens, you can expect to see HUD homes going for some real bargain prices. However, I might be dead wrong, simply because the government doesn’t have to worry about how much money it’s losing. It can hold empty, deteriorating homes forever if it wishes.

#4

Re: Found my first deal…lost my first deal!!! :- - Posted by Bill K. - - FL

Posted by Bill K. - - FL on December 22, 1999 at 20:00:15:

Hello everyone,
This is my first visit to the site. I’m just feeling my way around. I’m a investor/broker with the emphasis on investor. Anyway Ana, I’m registered to submit HUD offers so I have had some experience. I operate in S. FL. To be perfectly frank I stopped looking at HUDs over six months ago. The reason is they went with a new contracting co. in April (Southeast Alliance) and as a result I don’t see the deals like I used to. They contracted with different appraisers who have come in with some very high listing prices in my opinion. If you get into any of these deals I think you should net at least 10K to make it worth your while. When you add up all your costs you will see you need at least a 20-25K spread. Plan for a six month time frame. If you really want to pursue these listings then learn the system as it relates to # days for owner/occupants and when it becomes available to investors etc. Also I don’t know if you know it or not but you can access all the HUD listings over the Internet. I believe it’s www.hud.gov. Also figure they will take no less than 89% of list price net for the first 45 days. After that they might either relist at a lower price or if not they will take 80% net of the original list price. Of course net does not include any costs you want them to pay inc. the re commission (max 5.5%).Also the purchaser is supposed to close in 45 days from acceptance of the offer. They will contact the next highest offer if the orig. doesn’t close. Also at the web site you can see all the offers that were submitted after one has been chosen. Well, hope that helps. Like I said I have not been involved for six months so they might have made some changes I’m not aware of. Good Luck.

#5

Re: Found my first deal…lost my first deal!!! :- - Posted by Rob FL

Posted by Rob FL on December 22, 1999 at 14:04:00:

Keep on making offers eventually one will get accepted.

One thing to point out is you expect to buy for 66K, sell for 85K, and make a 15K profit. This means that you figure that the minor repairs, closing costs on the purchase, closing costs on the sale, holding costs, and other miscellaneous costs will only amount to 4K. Logically to me your 15K profit sounds quite high unless somehow you will immediately resell the property at retail without the help of a Realtor. Just curious about your exit strategy?

#6

A possibility… - Posted by SusanL.–FL

Posted by SusanL.–FL on December 22, 1999 at 10:32:26:

Submit your bid but offer $1,000 more than the other guy. There is always the chance that the first offer they received may not go through. It’s worth a shot!

Good Luck!!

#7

Re: Found my first deal…lost my first deal!!! :- - Posted by Sharonda

Posted by Sharonda on December 22, 1999 at 10:27:55:

The same thing happened to me with a HUD home. But do not lose hope because your next good deal is only right around the corner. Just make sure you have your eyes open so you don’t miss it. Best of Luck!

LET’S GET IT ON!!!

#8

Irwin, you’re right but… the night before Christmas - Posted by David

Posted by David on December 23, 1999 at 07:42:36:

What I’ve seen is that HUD has little concern about operating in a business like manner. They don’t care about clogged pipelines and have no concern that their inventories are building. They then have a auction run by Larry Latham, where all kinds of buyers come out of the wood work and pay ridiculous prices sometime more than market price fixed-up for a place not fixed up.

Twas the night before Christmas and all through the HUD house not a creature was stirring not even a c*ckroach. A little boy named Davey wanted to buy this HUD house and overbid a HUD repo that was needing some cosmetics but in a great neighborhood. Davey even sent the bid (pre-internet bidding days) to HUD via Fedex. The bid was received and signed for in the HUD mailroom before the bid deadline, but saddly “lost”. Even though Davey had the high bid the house was awarded to somebody else. Davey wrote and called everybody including his congressman and senator, to no avail. So it was not happy Christmas for little tiny Davey.

#9

This is what I LOVE about this site!! - Posted by Susan L.–FL

Posted by Susan L.–FL on December 23, 1999 at 08:06:39:

There is always SOMEBODY out there that has the answer!

Sometimes the information may not apply to me but I read it anyway so that I can see what others are up to in their investing (and to also learn something new).

Good post Bill K. Happy Holidays!! :slight_smile:

#10

Re: Found my first deal…lost my first deal!!! :- - Posted by Rob FL

Posted by Rob FL on December 22, 1999 at 20:56:57:

www.hud.gov is the HUD website, however, all the listings and bids in Florida must be submitted at www.firstpreston.com

#11

Re: Irwin, you’re right but… the night before Christmas - Posted by Irwin

Posted by Irwin on December 23, 1999 at 08:42:37:

Sooner or later I think that the glut will either catch up with HUD politically, or the private companies now managing the HUD sales will start losing money handling so few solds, vs having to service/administer on so many unsolds. When that happens, I believe the system will be changed.