Throughout my career I have bought and sold several HUD homes. The Federal US government’s s Department of Housing and Urban Development (HUD) offers low-cost residential foreclosure sales throughout the country. However, the sales process for purchasing such property is considerably more complicated if you were to compare it with buying a house from an individual. Let us see how you can go about purchasing HUD homes as either a personal residence or even for-profit:
How Much Would a HUD House Cost?
The typical HUD house is appraised at what is considered to be its fair market value. This is partly based on its location. Apart from that, the price of a unit that needs repairs like plumbing or a burner service is also adjusted downward. This is done to reflect the hefty investment that a new owner might have to make if he is going to improve it. This holds particularly true for those houses that are so run down that they are practically unlivable. I recommend involving an expert Platinum Real Estate agent before making a purchase. At Platinum Real Estate we have agent who specialize in HUD homes. You can contact me for more details. email@example.com
All HUD Units are Sold on As Is Basis
Since these units are sold on As-Is basis alone, there is little chance of buying a unit with plenty of curb appeal. You should be prepared to gut the place before it can become livable once again.
You Should Always be Prepared to Move very Fast
It pays to be well prepared and to know what your competition is up to before making a purchase. Here, it is important to understand that such a house can be a gold mine for a prospective investor. If you are interested in flipping properties, that is buying and selling them within weeks, this is a good option. There is enormous potential in renovating and selling a HUD house. And if you want to sit on your investment, you can simply rent it out while it’s capital value continues to increase.
Do Your Research and Exercise Due Diligence
Before making a purchase, it is very important that you thoroughly check all the background information on the unit’s history. Such a background check should include the following:
- Recent tax assessments
- The unit’s cumulative sales history
- The average sale price of other properties in the same locality
- You should also check for any undisclosed damages as well as other legally mandated information
A HUD house can be your dream home or the ideal investment but it can also turn out to be a terrible nightmare. This is why you should always involve the experts. If you have any questions about purchasing HUD homes, you should talk to me.