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The Benefits of Buying a HUD Foreclosure or Repo

December 15th 2005

The Benefits of Buying a HUD Foreclosure or Repo

Due your own research

For as long as I can remember I have heard of people buying HUD homes and fixing them up and selling them for a profit.  We did just that a few years ago and doubled our money in two years.  There are risks though.

A division of HUD (Housing and Urban Development) oversees the Federal Housing Administration (FHA) that insures loans for banks.  Sure you have heard about FHA loans before, but FHA does not actually loan the money they only guarantee the loan.  This makes it easier for banks to loan to people that would normally not qualify for a loan.

HUD is great because the loans are given to risky people.  This means they are more likely to default on the loans.  This is good for investors because the government is not so hot at getting top dollar for their foreclosures.  They hardly ever do anything to the property to make it more appealing.  This is a great opportunity if you are looking for a fixer-upper.

 

Find yourself a good Real Estate Agent that understands you are looking for distressed property.  The agent will need to be HUD approved and have the various keys to get you in the properties.  They should also be knowledgeable about the HUD contracts.  These contracts are different than regular real estate contracts.  Make sure the agent is familiar with the online bidding procedure for HUD homes.

Investigate HUD properties via the Internet.  Don’t expect the real estate agent to read your mind.  You know your capabilities and what you are looking for.  Create a list of properties you would like to see and begin by just driving by a few.  When you see one you like, contact the agent.

HUD property listings are usually posted on Fridays in most states.  You can place a bid on the weekend but it will not be counted until Monday.  Usually the bids are due by Tuesday for “Full price owner-occupants” only.  If the home does not sell here the properties become available for less than full price owner occupants only. 

After a week the property becomes available to everyone.  Investors who do not plan on living in on the property can invest at this time.  These time periods may vary from state to state, so check with a qualified real estate agent for the details.

HUD properties are sold as is. If you need help financing, look into the FHA 203k HUD Loan Program. These HUD loans will help you get the money to make the purchase, plus help pay to fix it up.  It will also give you maximum equity, thus minimizing your risk.  Again, always check with real estate loan professionals concerning the details.     

 
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By Dan Wilson
Best Syndication Staff Writer

  Real Estate

Keywords and misspellings:  reel estate estat owned proparty properdy


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Copyright 2005 Best Syndication                                     Last Updated Saturday, July 10, 2010 09:39 PM