OfflineOn April 6th we closed on a great HUD house. It was listed for 125k I offered 82k. It is a 4 bedroom 2.5 bath home. In a B neighborhood. An associate of mine said what did you do that for that way too low!? Well because I can.
The bank received my offer and and asked for my highest and best. I told them that IS my highest and best. They next day I figured I didn't get it. But to my surprise I receive and email telling my offer was excepted !!! Woo Hoo!!
So we use private money, our first person couldn't do it but the second person said YES! So the deal with them is 10% for 2 years. 100% financing.
So we estimated our rehab at 20k within a 30day time span. We were done on time and 500 dollars under budget. :)And it has been rented since week 2. the officially moved in on June 6th.
Here are the numbers on the house purchase price 82k rehab 19,500.00 total in 101500.00. ARV is 165k. 
Our monthly payment is 645.00 and it is rented out for 1050.00 a month! this was a very sweet deal.
We will do a cash out refi in 6-8 months and find another on
"Don't tell me I can't, Tell me how I can."
Congrats!!!!! Love it!!
Thanks for sharing!!
So your monthly payment I'm assuming is your payment to private money, yes? And does that equal 10% a year return for them paid out on a monthly basis or how is that piece structured?
My private money is still 50/50 splits (me work, them money, we both split cashflow and final profits at 100% financing), so I'm just trying to figure out other structures in the 8-10% range and how people are structuring it ---whether paying monthly, annually etc...
Thanks!
Louisa
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So with a hud property you can not just flip it?
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Awesome deal Donna!!!
I love to buy and hold with private money!! Having multiple sources makes it a lot easier too!
thanks for sharing your deals!! Very inspiring!
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
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Donna!
www.tw4homes.com website
https://tvallc.isrefer.com/go/RehabLite/reigirl/ FREE SOFTWARE FOR WHOLESALERS, REHABBERS AND AGENTS! Present professional looking deals to buyers and lenders as well as run your numbers and get the ROI.
It depends who you're flipping it to & it has to be done right in a dbl closing.
I could have just flipped it but it added over 50k to our net worth. We will sell later..... maybe. to wholesale I would have had to double closed
"Don't tell me I can't, Tell me how I can."
Great job!
Sweet deal Donna, even sweeter because the deal was funded with private money.
Reynold Orozco
I think a straight flip after you have title to the property. But if you're wholesaling hud properties, it's a double close. When you make the 1st offer on a hud deal, make dang sure you make your final offer, bc they won't let you change it after it's accepted. Also, EXPECT to get an extension, unless all your ducks are in a row & the buyer is ready to go quick. Before closing, HUD has to review all the paperwork 5 days before closing, which is another pain.
In Donna's case, they got a SWINGIN' deal at $165k ARV. The "highest and best" offer you make as the same price as the 1st doesn't always work the way you want or need it. In her case, it did. If they didn't take their higest offer, she could walk.
Nice, Donna!
your first offer is not necessarily your final offer; sometimes HUD will accept your first offer (usually if property is an aged asset, ie. been on the market for 90 days), sometimes they will ask for your best and highest; you can stick with your initial offer, which sometimes they will accept, but sometimes they won't, more so if they have other offers on the table, or if offers does not meet their estimated net proceeds (what they will receive after commissions and closing costs). You cannot get an extension with a HUD; once your offer is accepted, you have to submit signed paperwork and EM within 48 hours. If you withdraw your offer after acceptance, you lose your EM ($500-$1000). After acceptance, you have 30 days to close, so if you plan to buy and hold, buy-fix-flip, you pay with your own funds (or private money) at closing. If you want to wholesale, you do so with either a dry double close (where your buyer's funds are used for both closings) or a wet double close (where you will need to either use your own funds or transactional funding to do the first closing).
Always make sure that you do your due diligence with HUDs; most of the time these are properties that have been sitting vacant for long periods, so it's very likely that plumbing, electrical, HVAC will all need to be repaired or replaced, so keep that into consideration when you estimate your rehab costs.
However, as Donna's post shows, you can get great bargains with HUDs! I have bought several, and they all have been profitable deals!
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
PM and cash out refi. I LOVE IT! Keep it Going!
I am a Professional Real Estate Investor! And I see a whole army of my countrymen, here in defiance of the J.O.B. You've come to fight as free men/women... and free men/women you are! What will you do for that freedom?? Will you fight?!! Lets fight for it together!!!!
Congrats Donna.
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IM LOOKING FOR ANOTHER ONE!!!
"Don't tell me I can't, Tell me how I can."
Outstanding Donna !....
Watch your thoughts, for they become words.
Watch your words, for they become actions.
Watch your actions, for they become habits.
Watch your habits, for they become character.
Watch your character, for it becomes your destiny.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Our Heart's Desire must be nurtured by our mind,to give birth to common sense, that will enable us to seek out the path less traveled, with the greatest Personal Growth. -J.R.-
You know banks can be a great resource to leverage your money, but private money is SO MUCH BETTER! Thanks for sharing your deal