Posted by Wm-pa on July 02, 2002 at 09:40:45:
I bid on a HUD property in January 2002. Won the bid. The house is in a decent area, not great. I paid 38k and the comps for similar houses were 55k-62k. I put about 18k in rehab costs and currently have it FSBO for 70k. The market is pretty hot right here. I will not do this again, this turned out to be a total rehab job. I was not allowed to check behind the paneling, and when I did that is where the problems started. I was told I can’t pull anything off till I own it. So just by “looking” at it I decided to jump in to get my feet wet. Well I had to replace everything…plumbing, electrical, walls, water heater, furnace and after all was completed it looks great. I won’t have the profit I wanted, and all this work was not worth the effort for 6-10k profit!
My next property will be in decent, move in condition that I will Lease option. To me there are no real deals with hud. When hud prices a property it is near current market value so the chance for profit is slim. There are some HUD deals out there but far and few in between.
Wm-pa
HUD Properties - Posted by M. Farley
Posted by M. Farley on July 02, 2002 at 08:01:52:
Any suggestions regarding purchasing HUD properties? Has this been a good experience for most who have gone that route? Good/Bad experiences? thanks for any input.
HUD concerns… - Posted by David Krulac
Posted by David Krulac on July 02, 2002 at 09:54:26:
#1 the utilities are off and you can’t test any of the mechanical systems, electrical, plumbing and heating. In cold climates there is often freeze damage.
#2 owner occupant bidders get first crack for the first 10 days of bidding. Many of the better properties are not available to investors because they were sold to o/o in the first 10 days.
#3 DON"T even think of lying and saying you’re going to live there. The penalty is $250,000 fine and 5 years in jail.
#4 applies to all repos/reo/foreclosures, the former owner usually don’t take good care of the property in the last year or two of ownership, therfore there is a lot of deferred maintenance. also some are vandalized, and trashed. One repo we got had 40 yards dumpster of trash plus 12 pickup loads to be removed.
good luck, there are potential buys but there are pitfalls to be avoided also.
David Krulac