Saturday, October 25th, 2014

RSS Feed for This PostCurrent Article

Is HUD Opening the Floodgates?

So I’ve mentioned before how lucky I am to be part of this really phenomenal mastermind group called the Flip VIPs.

Besides our in-person meetings thrice yearly, another big, fat benefit I enjoy from this posse is the ongoing collaboration and free flow of information we share privately via email.

So just this week my friend Russ dropped a memo on us about a really great HUD deal he unexpectedly snagged…which started some back and forth HUD-related banter that was noteworthy to say the least.

It seems HUD may have finally become a motivated seller.  Meaning they may actually be really to start wheeling and dealing with investors on some of the tsunami of inventory they’ve been sitting on. They’re not coming out and saying it…but the indicators sure seem to be there.

Said another way: You might want to start slinging some mud at HUD right now…you might be surprised at what’ll actually stick.

So here’s a transcript of our email string…I’d love to hear your thoughts in the comments after you read it…

Subject: Holy crap I just got a HUD

Russ "you have no idea what I'm capable of" LebrascRuss Lebrasc wrote:
I just got my first HUD EVER, and I’m super surprised the bid, was excepted…
they had it listed for 94k, it is in the the extended bid period, and i just re-credited my bid login for HUD last night, and on a whim i offered (something ridiculously low, private for now) last night and they excepted my offer…. Usually i go look at properties, but i have not looked at this one, there are pics on line, but i guess i better go see what i’ just bought…
Blessings,

-Russ

Steph "Tampacrapper" DavisSteph Davis wrote:
Holy $%!@ that’s a nice discount!

Nate "Ignorant Wisconsin Man" AndreeNate Andree wrote:
A guy after my own heart!! Making blind bids, then getting them accepted, then messing your pants. I love it man! Just sent my Realtor 8 bids about 10 min ago and closed on a HUD yesterday.

Now…..go wipe and go out and see what you bought!!

Yahoo!!!!!
Nate

Ken "homeboy" HolmesKen Holmes wrote:
Ah man, I offered 19,900 and you beat me!
Watch out for that pit bull in the living room when you go.
Just kidding… You have to update us, photos and all.

Steve "slow jamming" CavanaughSteve Cavanaugh wrote:
Congrats Russ. How long had it been listed?

Steve

Russ "you have no idea what I'm capable of" LebrascRuss Lebrasc wrote:
According to the mls listing 74 days….
-Russ

Nate "Ignorant Wisconsin Man" AndreeNate Andree wrote:
Listen to this one guys……the agent that listed the hud I closed on yesterday said they are only taking 82% of the current list price and there isn’t anything I can do about it.

After I laughed on my own spit I told her that the one we just closed on came out last year at 80K, then went to 70K, then went to 46K, then we got it for 25.5K. Doesn’t look like that’s 82% sweetie pie.

Bottom line……..make the offer no matter how ridiculous it is or what % of the list price it is in regards to HUD’s. I’ve been buying them for many years and some of the so called “experts” have theories on % of list pricing, how long they supposedly have to be on the market before they take your offer, blah blah blah.

The heck with all of that folks. Just make the offer on HUD’s and press on.

Russ……heck of a job!!
Nate

Russ "you have no idea what I'm capable of" LebrascRuss Lebrasc wrote:
I heard from my reo broker who i hang my licence with, that he got an offer for one of his clients in another county accepted, $250K list, offer bid was 55K, hud accepted…. hows that for 82% of list….

it’s what made me make my crazy offer, maybe i should have offered lower ;-)
-russ

Craig "Scotch and Cigars" FuhrCraig Fuhr wrote:
That’s awesome Russ.
Nate – you are in fire today. I’m roaring at your comments.
Sorry this is short. It was sent from my iPhone.

Steve "slow jamming" CavanaughSteve Cavanaugh wrote:
Cool on the HUD – I actually just won another Hudson and Marshall auction, not even a week after bidding – and I just placed what I thought was a B.S. bid one night before going to bed. Woke up the next morning and they accepted! I forgot to add my agent on as buyer’s agent, and they even put her on after the fact!

Steve "The Godfather" CookSteve Cook wrote:
Note to ALL! HUD is opening the floodgates. Your story Russ is the second time I’ve heard it in the last week and the last guy got 5-10 houses at similar discounts.
I rode a wave of these back in 2001 and got 27 of them in 6 months.  Let the offers fly- they’re biting.

Blessings,
Steve

Craig "Scotch and Cigars" FuhrCraig Fuhr wrote:
Just signed up on the new HUD site and made my first bid. I intend to make a bunch more tonight. BTW, all HUD houses on my MLS are NOT on the HUD site, so be sure to set up a HUD search on your MLS.

Sorry this is short. It was sent from my iPhone.

Nate "Ignorant Wisconsin Man" AndreeNate Andree wrote:
Great point Craig! Same thing happens here.

Craig "Scotch and Cigars" FuhrCraig Fuhr wrote:
Don’t miss the nuggets, Baby. Them nuggets is out there!!
Sorry this is short. It was sent from my iPhone.

Russ "you have no idea what I'm capable of" LebrascRuss Lebrasc wrote:
Lets have a hud bowl… who can get the most huds by the retreat?
Putting in another bid now :)
-Russ

Lawrence "Alabama Law Dog" RobertsLawrence Roberts wrote:
put in 10 last night..got 30 more to go.  Then its on to the next county..:)
Law

Ken "homeboy" HolmesKen Holmes wrote:
What’s the deal on yesterday’s house, Russ? Deal or no deal?

Russ "you have no idea what I'm capable of" LebrascRuss Lebrasc wrote:
Ken, its a deal :) it works for me on several levels, once i get signed confirmed contract, i may try and whosale this puppy, it needs work but nothing major, cosmeticy stuff :)
-Russ

Steve "slow jamming" CavanaughSteve Cavanaugh wrote:
On a somewhat related note, I just ratified my second Hudson and Marshall auction in the past three weeks. The deals are out there right now for sure.
-Steve

Brian "short sales smoker" MeidamBrian Meidam wrote:
What was asking price relative to your accepted bid on the H&M auctions?

Steve "slow jamming" CavanaughSteve Cavanaugh wrote:
On the first one it was $149k, I’m buying for $105,500. The second was $129k, I’m buying for $105k
-Steve

Ken "homeboy" HolmesKen Holmes wrote:
Steve, are you using the “bid now” part of the H&M website, or waiting for the actual auction dates.?

Steve "slow jamming" CavanaughSteve Cavanaugh wrote:
The bid now. I’ve never been to a h&m live auction. In both cases the auction period had not yet ended and they accepted.
-Steve

Ken "homeboy" HolmesKen Holmes wrote:
OK…I got 5 HUD offers in today. And they are low. Maybe not as low as Russ’ offer, but plenty low enough. We’ll see what happens. In honor of Nate, I didn’t go look at 2 of them.

Nate "Ignorant Wisconsin Man" AndreeNate Andree wrote:
I’m blushing Ken :-) I put in 9 today as well.

Steve "slow jamming" CavanaughSteve Cavanaugh wrote:
This is happening here also.  One of my students just locked up a HUD that was listed for $145k.  His price: $80k.  Renovation will be around $30k, ARV is $199k.  That’s a deal! Then I spoke with another investor locally that got one yesterday also.  Listed for $165k, buying for $90k, needs around $30k also!  ARV on that one is around $215k!  Get out there and make HUD offers today!
-Steve

Lawrence "Alabama Law Dog" RobertsLawrence Roberts wrote:
Is it one asset company you are noticing that are taking the lower bids. HUD has 5 asset companies in any given area.
-Law

Steve "slow jamming" CavanaughSteve Cavanaugh wrote:
Don’t know Law, I will look into that.
-Steve

Ken "homeboy" HolmesKen Holmes wrote:
Steve, do you get counters on HUD bids? Nate says he does but we just get a yes or no. Really now even a no…just a yes or nothing at all.
Ken

Steve "slow jamming" CavanaughSteve Cavanaugh wrote:
Ken, a yes or nothing at all in my experience.  My student was not countered, I know that for a fact.  Funny thing was he really didn’t want this particular property, so I told him to lowball it just to compensate for that.  Well, look which one he ended up with!
- Steve

Ken "homeboy" HolmesKen Holmes wrote:
Awesome advice Steve….some of my best deals were on properties that I didn’t want and offered low assuming they would not take it but then at least the seller would be offended and go away.

Russ "you have no idea what I'm capable of" LebrascRuss Lebrasc wrote:
I think every offer should be treated like you dont want it…..

So…what say you?  Agree or disagree with the Flip VIPs?  Leave a comment!

GD Star Rating
loading...

About 

JP Moses is a roughly-hewn man-child who first got into REI after reading Rich Dad, Poor Dad back in Y2K and went full time in 2002. He's tinkered in everything from landlording to short sales to rehabs to Realtoring to REOs to notes to owner financing, blah, blah, blah...Till he finally stuck his flag deep into wholesaling and has since flipped somewhere north of a couple hundred deals.

JP's not a “guru” but also doesn't think it's a bad word. Among his core values are authenticity, creativity, big honkin' value, general fun-ness and being unshaven. He's super proud to be chief blogger guy at REItips.com and host of the free REIology podcast. He also thoroughly enjoys sharing his 53 best real estate investing forms with anyone who wants them. You should totally check that out. :-)

  • http://www.wealth-steps.com/myblog Luis

    I have flipped 5 HUD’s in the last year and they had always taken very low bids if the house is in bad enough shape. Over the last couple of months they have completely revamped their bidding system and I am still trying to figure it out. In reality from what I have seeing they were listing at prices higher than before.

    I got three HUD properties on my watch list and now that I read this I am going to pull the trigger and see what happens.

  • http://REItips.com/ jp moses

    Awesome – go get you some, Luis! :-)

  • http://www.FlippingJunkie.com Danny Johnson

    I am going to have to start looking at HUDs again. Thanks for the tip. My first house was a HUD, back in 2003. I don’t think I’ve bought one since.

    Going right now…

    Thanks

  • Jermaine Simmons

    This post is timely indeed, very timely. I submitted two hud offers two days ago and they didn’t get accepted but again, it was only two. I’m filling up the pipeline and am about to let them fly!!

  • James McCann

    How do you get set up with HUD to make these offers and does anyone have advice on mentoring/coaching for this type of investing? Thanks!

  • Josh Hepner

    I have put offers on many HUD houses however with little success in my market they have been going at or above list price. Maybe its time to try a different market. Thanks for the advice it was really eye-opening.

  • http://www.wealth-steps.com/myblog Luis

    Sometimes list price is still a good deal. Do your research.

  • http://www.lindasellsmoore.com/ Linda

    Thanks for the information on the HUD houses however I have little success so I might try a different market!

  • http://baltimorerealestateinvestingblog.com/ ncarey

    I have never bought a listed property. However I just recently started to make offers on REOs. I have seen some pretty low prices relative to list price.

  • Saxelrod

    How does one get set up to make these HUD purchases?  Does HUD have a website on which to submit bids?

  • http://REItips.com/ jp moses

    You have to go through a real estate agent that’s “HUD certified”. There’s not really a list…you have to call a real estate office and ask them to connect you with an agent certified to submit offers on HUD properties. Or you can (even better) get a referral from other investors. If you’re in your local REIA, I’m sure you can find one at the next meeting.

  • Anonymous

    This can be a tough market to crack, experience and patience will certainly help you out in the long run.

  • Anonymous

    I love the “info graphic” affect with the water falling.  Gets the point across perfectly!

  • Kim

    in regard to low offer, my agent said she wont do it because the profit is not enough to cover her broker’s fees. any thoughts on this?