HUD Foreclosure Homes
HUD stands for the department of Housing and Urban Development. When a home is referred to as a HUD home, it means that the home currently has a FHA loan, and is currently in foreclosure. What does this mean for investors? It means there are exceptional real estate opportunities out there at below Fair Market Value prices for property investors that have time and resources to search for them.
Many web sites claim to be the key source to foreclosures, but when looking for foreclosures close to your home, simply search on google for “HUD Homes <put your state here>”. For example, to find HUD homes in Texas, simply search google for “HUD Homes Texas”. The first few listing will direct you to local agents or real estate companies offering HUD homes.
Purchasing a HUD home occurs through a sealed bid auction. The auction is online, and initially only open to owner occupied bidders. This means you can only bid if you plan to live in the home as your primary residence. If no bids are received after a few days, bidding opens to investors. An agent experienced in selling and purchasing HUD homes is required to place the bid, and most sites allow you to search for these types of real estate agents by location.
Keep in mind HUD homes are sold AS-IS, meaning HUD will not repair any damages. Many HUD homes require major work. Be sure to review the home inspection report, and to hire your home inspector to thoroughly check out the home.
Purchasing HUD homes for investment property is a great way to expand any property portfolio, and there are exceptional deals to be had resulting in great cash flow and appreciation opportunities.