What Makes HUD Homes so Great?
By Larry Goins
HUD Homes can be a wonderful investment if you can play your cards right. Some people avoid these properties simply because they don’t understand what makes HUD homes so great. I’m going to give you a few clear reasons why I think these properties are a tremendous resource for investors. Let’s start at the beginning.
Finding them
The list of HUD homes for sale is readily available to anyone, even without a real estate license. This makes your job of finding suitable properties to look into easier in the first place. There is also a limited amount available each month—so it’s usually manageable to stay on top of without being overwhelmed.
The best part is that you don’t have to gather the information you need about each property in bits and pieces in order to make an intelligent offer. HUD has the list organized pretty well in advance for you to use. Of course, you’ll always need to do your own due diligence, but these numbers can be used as rough estimates to save time, and you can verify them later on.
Bidding on them
Another advantage of bidding on HUD properties is the bidding process is streamlined and simple. When the time comes, an agent will submit your offer online and you’ll get an answer back the next day if it is accepted, or if they have made you a counter offer. Typically, it’s either accepted or rejected, but if it is rejected they will not send any response at all. The offer simply expires and the property is still open to new bids for the current day.
Since you are not dealing with homeowners and the emotional element that can comes with it, you bypass much of this to a degree any time you use an agent, but with HUD homes especially, you’re dealing with an organization that has its own policies and procedures. This means that it gets efficient and predictable after a while.
Remember, it’s a numbers game. Each offer you make can be done in a relatively short amount of time, so if you are dedicated to making multiple offers each week, it’s just a matter of time until one is accepted. It might take 25, 50, or even 100 offers or more to get one accepted at the low prices I will show you how to buy at. If you expect that going in, you will not get disappointed after making several offers without getting a positive response.
Competition
Another advantage of working with HUD is that there is little competition. Most investors are chasing after people in foreclosure or trying to buy properties at auction. And when you submit your bid, HUD will only compare your offer to any other offers that happened to have been submitted that same day (if any) before making their decision. Typically, you don’t have multiple people making offers on the same day. Now, depending on the market you live in, there could be competition. If you are an investor and live in an area where there is competition, I suggest making offers in a different market where there is not as much competition.
With HUD you can get big discounts. I’m not saying this because I heard it somewhere; I’m saying it because I do deals all the time and can show you examples. So, if you find a local real estate agent who tries to tell you that HUD will not accept offers under 80% or 90%, don’t bother listening.
We have a strategy that allows us to capitalize on this by buying dirt-cheap houses that no one else wants. We then sell them for 3-6 times what we paid by selling them with seller financing. We have gotten returns from 119% to 788% on our investment by receiving monthly payments and getting paid more over time. This is a great concept that works extremely well in today’s market. I call this my Filthy Riches strategy. If you would like to learn more about this, please click here.
I hope you have enjoyed this article about making money with HUD homes. This is just a small portion of the ways you can make money with HUD homes.
Larry Goins is an author, trainer and national speaker. He has written several books on real estate investing that are available wherever books are sold. He is making his latest book HUD Homes Half Off! available for free for a limited time by clicking here.
