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HUD Properties: Buying HUD Property for Great Profit


Who says there are no more bargain deals left in real estate industry? There are a total of more than 28,000 homes from Housing and Urban Development (HUD) available all over the country. HUD properties are one of the better deals you can find and they make great investments for anybody that is interested.

What are HUD Properties?

HUD properties are homes that had loans which were insured by the Housing and Urban Development, the U.S. Department of Agriculture and the Veteranís Administration. The HUD homes are acquired when the owner defaults on a Federal Housing Administration (FHA) mortgage, which are intended to promote home ownership among working class Americans. When the loans turn bad then the lender repossesses the home. At this point, the Department of Housing and Urban Development is in charge of repaying the lender any money that they lost on the deal. When the home is taken over by the agency, it becomes an HUD property. You can find HUD homes at HUD website and Homesales.gov.

HUD properties are not sold to the general public right away. But they are first offered to approved non-profit organizations (NPO) at a fifty percent discount below appraised values. The NPO can choose to rehabilitate and resell them. Any HUD properties that are not taken up by the NPO are subsequently offered to teachers and policeman at a ten percent discount. If no offers are made after five days, the HUD properties are put on public auction.

How to Make Profit from HUD Properties?

Investors are particularly interested of HUD properties because HUD properties can be bought at a great discount as they are often sold at appraised or below appraised value. HUD properties are sold "as is" with very little description of the home assets and features. Therefore, investors are advised to visit the HUD properties and get thorough inspection done before buying. The inspection will reveal how many repairs and how much it will cost to make the repairs. While many HUD properties are in bad condition and need extensive repairs, but in reality there are HUD properties in the market that are in very good shape and require only minor repairs.

As an investor, your aim is to find good condition HUD properties then fix these homes up just enough to sell them back at the market value. In other words, the profit equals the difference between the market value cost and how much you actually bought the home for. In many cases, an investor can make tens of thousands of dollars if they manage to flip few HUD properties a month.

Even though HUD properties can be found in almost every state, but there are not many HUD homes available now especially in the hot markets. In California and some part of Southwest, most HUD properties were snapped up before it got a chance to make it to the foreclosure process. That said, you can still find plenty of HUD properties in the Midwest and South with Michigan, Illinois, North Carolina and Texas leading the pack.

Even if you are not an investor but just in need of a new home, you may also want to consider HUD properties. Although you may have to put some effort into repairing the home, but you will be able to make the necessary repairs with the upfront money that you save.


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