The U.S. government’s Department of Housing and Urban Development (HUD) has been a great place for flippers and rental rehabbers to find deals. When a bank forecloses on an FHA-backed mortgage, they submit a claim to the Federal Housing Administration and turn the title over to HUD.
Just like a bank, HUD wants to sell the homes quickly. So they price the houses to sell. Since we are dealing with a government bureaucracy, HUD has a specific procedure to sell its homes:
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A HUD-approved broker gets the listing and advertises it just like they would with any other house.
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For the first 10 days the house is on the market, HUD only allows owner-occupants to bid on the house.
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After that initial period, investors can bid too.
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All bids have to go through a licensed HUD broker.
The HUD house website has more details about buying HUD homes. You can also find listings of HUD homes on the site and find HUD-registered brokers.
The trouble with good deals though, is that they can bring a lot of competition. Lots of investors know about HUD houses and the HUD website. That means sometimes HUD houses are bid up far higher than they are worth.
You didn’t think finding a good deal would just involve looking up one on a government website, did you?
Wouldn’t it be good to know what your competition is doing? Are they getting some great deals in your area? Are they paying way too much?
Want to Spy on Your Competition?
There’s a website that will let you know how your competition is doing with HUD homes. It’s a great resource for HUD home investing.
To view all the information you want on HUD homes, head on over to the HUD Home Value (HHV) website.
At first glance, the HUD Home Value webpage looks like they have the same search features of the government HUD website but with ads:
Government Website:
HUD Home Value Website:
Dig into the HUD Home Value. Don’t just stop at the first page. In it, you will find information much better suited to investors rather than the average HUD buyer.
Take a little time to peruse the menu options on the top of the website pages.
Besides the regular search on the Home page, HHV also has a quick search option:
Just pick a state and quickly see a list of HUD homes in that state. Once you pick a state and click on it, the link takes you to another page to search by city, county or zip code. The site will display the top 5 of each search category at the top:
The next selection on the menu bar - HUD House Bid Statistics - is where the site really shines for investors. Just enter your search criteria into the webpage:
The site will then show you detailed information about the deals other investors are finding:
From this information, you can really figure out a bid that HUD will accept for your area. Then, by looking at comps, you can determine if the HUD-acceptable bid is a great deal or too high to make money.
You can click on any house in the list on that screen to see more details:
If you want more information, use the address to look up the house in the MLS and/or websites like Zillow.
But Wait…There’s More!
The next selection on the menu bar is the 'HUD Home Market Analysis.' The page has a listing of all 50 states along with the number of counties in the state and the population. I’m guessing the population figures come from the most recent census.
Each state has a link that lets you drill down to a list of counties and its populations. Click on a county, and you’ll see a page with a nice analysis of how HUD homes are selling in that county:
Granted, it doesn’t reflect the market as a whole. But it does let you know:
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How many HUD homes there are – lots of them may indicate a declining market (adjusting for population of course)
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The trend of how many HUD homes sold in the past 30 days to 2 years, also indicating if your market is improving or declining
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What your competition is paying for the average HUD home in your area
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How fast the HUD homes are selling (days on market)
If you’re interested in a specific HUD home, you can go up to the menu bar and select ‘Search for a Case Number.’ You can also pull these numbers from the Quick Search or House Bid Statistics option.
Putting in this selection sends you to the same details about the house you receive from the other options.
You’ll also see a ‘More’ selection on the far right of the menu bar. Clicking on ‘More’ gives you another drop-down menu. Besides the normal ‘Contact Us’ and ‘About Us’ pages, HHV also has a listing of all the HUD homes available in the U.S. (may be good for virtual wholesalers looking for a new area).
HHV also maintains a blog to help you with tips and techniques to get the best value on HUD homes.
Just like with any investment purchase you make, you will want to do your due diligence when purchasing a HUD home. But many investors have made a whole ton of money flipping or renting out HUD homes.
Do You HUD?
Tell us about your experiences investing in HUD homes in the comments section below.
Do the Research – You make money when you buy a house, you just put the money in the bank when you sell. Make sure you check comps, rehab costs and the market to make sure you have a profitable deal.
Investigate HUD Homes – There are all types of motivated sellers out there. The Department of Housing and Urban Development is one of them. Take a look at what they have to offer.
Act Quickly – HUD homes are easy to find. That means lots of other people can find them too. If you find a great deal, take action before someone steals it from you.
JP Moses
is a real estate investor in Memphis, TN, with experience ranging from land lording to note buying, rehabbing, and wholesaling. However, wholesaling is the area that he enjoys most and where he bring the most experience and expertise to his students.