Buying a HUD Home can be a daunting task. There is a lot of red tape surrounding anything that involves a federal agency. In this post I am going to reveal the exact method I use to effectively buying HUD homes at significantly discounted prices. In less than 2 years, I have effectively acquired 4 HUD homes for between 60% and 80% of their market value. If you are just beginning, I would recommend that you read the following posts before continuing:

  1. The One Key to Real Estate Investing
  2. Picking Partners for Real Estate Investing
  3. Simple Guide to Real Estate Investment Property Evaluation

Pay particular attention to the last article listed, as you can download the xls spreadsheet and use it to help you produce a bid that may seem low, but will allow you to estimate your offer price per your desired profit ambitions. If you have read and agree to “The One Key to Real Estate Investing“, than you will not think that your offer is too low. However, what has frustrated me in working with sellers that privately own real estate is that they think that they should get an offer that is very close to their asking price, and are unwilling to negotiate. I have submitted countless offers to sellers attempting to acquire a property at a price I know I will make money at, all to no avail. Even if you are able to find a home where a seller is truly desperate, you are often faced with many more road blocks that will derail your contract and drive you bonkers; which is why I turned to HUD home buying tactics.

A quick example of a would be deal I had with a woman who was going through a divorce. I came up with an offer that would work for me, and the seller, but the realtor killed the deal. She knew that the owner’s note was greater than my offer amount, and did not want to put in the work necessary to foster a short sale.  While I am a realtor myself, I must say that most realtors out there are worthless, and provide no value while charging a ridiculous 6%. All that most realtors do for you is list your property in the multiple listing service (MLS), stick a sign in the yard, and wait for another agent to bring them a buyer. The real power is in the MLS, which is the second reason why I became a realtor myself (the number 1 reason is to keep most of the sales commission myself).

OK! Enough ranting about why most realtors aren’t worth throwing peanuts at. Let’s look at the method I use for buying a HUD home. There are 3 basic steps to buying a HUD home for less:

  1. Knowing the HUD Listing System
  2. Timing Your Offer
  3. Don’t Worry about the paperwork

Go to Buying a HUD Home Part 2: How I Acquired 4 Homes in Under 2 Years

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