Copyright Steve Gillman. For more Tips For Flipping A House, go now and subscribe to the free 'Fix and Flip' course at: http://www.TipsForFlippingAHouse.com
Those who want to invest in real estate often get excited by HUD foreclosures, thinking that they are going to buy a house for half of what it's worth. Real estate investors know that this isn't too likely. However, there are opportunities for flipping these houses for a profit, so lets see where.
HUD foreclosures are homes that had loans on them guaranteed by the Department of Housing and Urban Development. When owners default, they lose the house. HUD pays off the bank and takes possession of the home, which they try to sell for market value.
In most markets today, they probably do sell close to market value. Government bureaucracies may be inefficient and they certainly make mistakes at times, but then it isn't some bureaucrat putting the price on the houses. Normally HUD's foreclosure houses are sold by real estate agents, and they should have some idea of what a property is worth when they recommend a listing price.
Also, HUD takes bids first from owner-occupant purchasers first. Only after this initial offering period are investors allowed to buy the home. In other words, if there is a truly underpriced home, an investor may never have a chance to buy it anyhow. But there is some good news.
HUD Foreclosures - The Opportunity
Fortunately, there are some opportunities here for the real estate investors who want to do some work. You can sometimes flip a HUD house for a good profit if you're willing to run the numbers and do a little work. Why? Because HUD foreclosures are sold "as is," and often have enough problems to scare away most home buyers.
They may sell near "market value," but a beat-up house will often have a market value that leaves room for a good profit after fixing it up. The market for such a house is mostly investors, after all, not owner occupants. Real estate investors will pay only what works for making a decent profit.
In other words, the initial offering period that is open only to owner-occupants is not a problem. Think of it as a free service to you. The buyers are screening out the homes that wouldn't sell cheap enough to fix and flip for a profit anyhow. Anything that doesn't scare them away doesn't have much potential, so you are left with the ones that CAN be profitable.
To invest in HUD foreclosures, find a real estate agent that handles them in your area. Look for properties that have problems, but problems for which you can estimate the cost of correction. Get advice from an agent on what the finished home will sell for, subtract from that every last possible cost to fix it up, and subtract your profit. Now you have the highest price you can offer.
- Related Videos
- Related Articles
- Ask / Related Q&A
- 5 Secrets To Find Your Perfect Central Coast California Real Estate House At A Bargain
- 5 Amazing Tips To Find Your Dream Dublin California Real Estate House At A Bargain
- Indianapolis Real Estate Housing Market Maintains Number 1 Rank
- Indianapolis Real Estate Housing Statistics
- What is a Real Estate Housing Bubble?
- The Importance Of The Real Estate House Sales Contract
- Real Estate Housing Bubble Bursts
- Buying Real Estate - House Hunting Tips And Ideas
REO Online Training Programs
By: Joshua Mintz | 10/07/2009The REO Online Trainign program I use is called , "The REO/BPO Business Kit". Its got ton's of information -with video's and MP3's for those that dont like to read. Everything is included, not just REO Training. But if all you are interested in is REO, than you will definitely have what you need to become very REO ready.
Real Estate Values - Where To Now?
By: Steve Gillman | 10/07/2009Are real estate values headed higher or lower? A look at the factors influencing them.
The Best Queries on Real Estate – What Do Title Companies Do
By: Maria | 10/07/2009If you ever have that urge of investing in real estate or wanting to have a place you may call your own, then this is the right time to go ahead and plunge into this exciting journey. To have great outputs in your quest, there are basic components involved in real estate you need to know and eventually seek for assistance and facilitation of the different processes your property acquisition may entail. One of the most important and vital components in this industry is the title company.
The Indispensable Truth about Home Inspection
By: Maria | 10/07/2009Purchasing a home is a long-term investment you may have in venturing to real estate that is why wise and proper orientation on how to go through this process is vital to successfully seal your deal and have the house of your choice. Now more than ever is the best time to invest on real estate taking advantage of the price down trend in the industry. Yet how would you know that you are in the right track in your venture? There are very helpful assistance you can find particularly in hiring and e
Closing Costs to Expect When Acquiring Your Own Home
By: Maria | 10/07/2009No matter what the economic state may be, real estate industry will continue one of the fast-paced and booming sectors in the market. Fluctuations would normally have various effects in this particular form of entrepreneurship but in whatever side of the coin you may refer to, the impact is certainly on the good side of the business. Thus, it is important to know and understand some vital aspects of real estate to make your pursuit and ventures in this arena something worth investing that would
How FCRA protects the home buyer
By: Ravisankar | 10/07/2009There are many tools that the government uses to protect the consumers’ rights as far financial information and their usage is concerned. The Fair Credit Reporting Act (FCRA) is one such law that seeks to protect the usage of credit information by credit reporting companies.
Hyderabad a vast challenge in real estate sector
By: Shailendra Singh | 10/07/2009Many people fail to consider that the city of Hyderabad (known also as Cyberabad) is witnessing a major change these days. The whole city owing to the economic rejuvenation perceives an overall development and all thee factors are developing the city-based real estate sector to a great extent. Can it be compared with that of Bangalore? It's without a doubt and according to pundits; in some key areas Hyderabad is outshining Bangalore even.
Advantages of property market in Delhi
By: Nitin | 10/07/2009Now we are going to discuss the advantages of the property market in Delhi .It is a huge industry as it the capital of the country.
New Ideas About Retirement
By: Steve Gillman | 22/06/2009 | Elderly CareLet’s just eliminate the idea of retirement. Let’s help those who need help - old or not, prepare for times when work isn’t possible - which can come at any age, and make space for “creative time” throughout life.
Ideas In Action
By: Steve Gillman | 16/06/2009 | EntrepreneurshipIdeas in action - that’s what all these creative thinking and problem solving techniques are all about.
Transcending The Self
By: Steve Gillman | 11/06/2009 | Self HelpThere is a lower “self” that we cling to at our peril.
Brain Experiments You Can Do On Yourself
By: Steve Gillman | 05/06/2009 | Mental HealthSome “tricks” to improve concentration, make for clearer thinking or otherwise boost your brainpower.
Does Using Walking Sticks Conserve Energy?
By: Steve Gillman | 03/06/2009 | Travel TipsA look at whether using walking sticks and trekking poles really saves energy for hikers and backpackers.
How To Save Money On Heating Bills
By: Steve Gillman | 25/05/2009 | Home & FamilyA look at how to save money on heating bills without freezing.
How To Save Money On Food
By: Steve Gillman | 20/05/2009 | Home & FamilyA look at how to save money on food, with both groceries and eating out.
Three Winter Survival Shelters
By: Steve Gillman | 14/05/2009 | CampingA look at a few of the basic winter wilderness survival shelters that skiers, hikers and others should be familiar with.