HUD homes are a blessing and a curse to the real estate agent. Recently here in Kansas City I’ve been looking at quite a few HUD homes on the Missouri side. Sometimes they are quite the buy. Others are overpriced junk.
Working mostly with real estate investors I look for properties that would be good rentals, have sweat-equity to be earned, are below market even after purchase+repairs+sweat equity and would cash flow with 20% or less down. HUD homes are plentiful. What I just described is a less so.
The Blessings are that HUD homes pay us real estate agents 5% commissions. So that sounds great. At least until you get to the Curse part. There is unbelievable attention to detail in the mountain of paperwork that is required. And the government loves false deadlines. On any given transaction I’ll have to spend at least $60 in FedEx fees and worry endlessly as to whether or not I forgot one set of initials somewhere which will cost me more. Then there is the interchangeable terminology that HUD has on their contract addendums that confuses everyone.
If you need them to sign forms you request? Forget about it. You have to jump through all of their hoops but they aren’t doing crap for you and your local real estate requirements. And they seemingly always pick someplace to deliver that earnest money that is at least 30 miles from my office.
Now, what does all of that have to do with you? Well, it really doesn’t. I just like to gripe. 🙂 I’m dealing with three HUD homes right now. I’m grateful for the business. It’s just so much more cumbersome than a non-HUD transaction. It is comical, really.
Keep in mind that as a real estate investor HUD homes are only available to you after the first round. So some of the best deals are gone before you are eligible. Unless you commit fraud…which I really do not recommend.