OfflineI have had a HUD home under contract for 45 days now. I also have another contract with a CASH buyer, but his bank only will release funds at closing.I had to get two extensions because I had found out that HUD has too many rules and restrictions.
We were suppose to close this Friday but we will not be able to close and most likely I will need to cancel the deal.
The rules with HUD is that you have to have the funds WIRED a day before closing. In this case my buyer can't do this because his bank will not release the funds prior to closing. Now, I was going to get costal fundng to help me here, but with their fee's of $4000, I will not make money on this deal because I have the house under contract with HUD for $28,000 and I have a contract with my cash buyer for $30K. In this case I would lose money because I would end up owing costal funding money.
This was a learning experience with HUD obviously. If I knew someone that could wire the $28,000 and they get back the $28K hen this could work and I would get my $2K from the cash buyer.
So, I am sharing this HUD home experience with you all to make sure that your buyer has CASH and that he/she does not need to depend on a bank to release funds if you plan on doing HUD deals. Also keep in mind that if your buyer is financing the deal HUD will not allow it because ou must have the titel for 90 days. You must have a CASH buyer.
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote
Yes, I will give some more insight on this next week. Rina, your right, this is a double closing. HUD actually does not allow simulatanously closings. It has to be a double closing.
Also if I had the option of getting a retail buyer, I would have made so much more. The issue with a retail buyer is that his/her bank would have the 90 day rule I beleive. The bank would not allow the loan to the retail buyer because the house would have had to been occupied/owned for 90 days.
Cbrpower, probably can explain this better with his experiences with HUD.
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote
Isn't it great to see that members here have faith with each other that made one deal possible? You guys rock!!! keep up the good work and trust among each other.
GOD BLESS YOU ALL!!
Wow.. Then they arent really hard money lenders. Another word for a hard money lender is asset based lender ie I don't care ANYTHING about the buyer. I only care about the property. I mean.. if I have that kind of FICO, why would I pay a HML? DP I suppose.
In the "good ole days", HMLs actually HOPED the property would go into default.
We were suppose to close this Friday but we will not be able to close and most likely I will need to cancel the deal.
The rules with HUD is that you have to have the funds WIRED a day before closing. In this case my buyer can't do this because his bank will not release the funds prior to closing. Now, I was going to get costal fundng to help me here, but with their fee's of $4000, I will not make money on this deal because I have the house under contract with HUD for $28,000 and I have a contract with my cash buyer for $30K. In this case I would lose money because I would end up owing costal funding money.
This was a learning experience with HUD obviously. If I knew someone that could wire the $28,000 and they get back the $28K hen this could work and I would get my $2K from the cash buyer.
So, I am sharing this HUD home experience with you all to make sure that your buyer has CASH and that he/she does not need to depend on a bank to release funds if you plan on doing HUD deals. Also keep in mind that if your buyer is financing the deal HUD will not allow it because ou must have the titel for 90 days. You must have a CASH buyer.
To me.. the less on of all this is that 2K is WAAAAAAAAYY too skinny. There really never WAS a deal there to begin with.
Just not enough spread for JASON to make good money. BUT for the $1000 he got, it was a good learning experience. And he didn't have to back out of the deal. Wiser for the next one.
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
I agree Rina, after researching on Zillow it looks like this was a great deal for the end buyer. Homes in that area were valued at more than 30k. But this was a learning experience and you are right, he didn't have to back out, and he still made a profit which is what is important.
This train, Dreams will not be thwarted
This train, Faith will be rewarded
Big wheel roll through fields where sunlight streams
Meet me in the Land Of Hope And Dreams
Bruce Springsteen
I agree Rina, after researching on Zillow it looks like this was a great deal for the end buyer. Homes in that area were valued at more than 30k. But this was a learning experience and you are right, he didn't have to back out, and he still made a profit which is what is important.
This train, Dreams will not be thwarted
This train, Faith will be rewarded
Big wheel roll through fields where sunlight streams
Meet me in the Land Of Hope And Dreams
Bruce Springsteen
Yes, that is true. It was definately a good deal for the end buyer because houses on that street are in the $70K range and up, but this was a learning experience and I already had two extensions on this house. The main problem I think that most of my buyers wanted a bigger house, because this house was only 776 sqft. It was a 3 bedroom, 2 bath, but the 3 bedroom was in the basement. Overall I still made a profit and Jeremy made a profit, so it turned out well and now I am ready to make more HUD deals now that I know the process and rules with HUD and the types of houses that will sell quicker.
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote
Any deal where a profit is made is a good deal....keep moving forward Jason.
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!
You learned.
You'll make out better on the next one.
But the important thing is you took action and at the end of the day you aren't the one saying, "Well, I ALMOST did it." Learning is priceless, and YOU got paid for it.
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Thanks for your support on this. Overall, I made money.
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote
Congratulations to both of you! Now you will know how to procede better on the next HUD deal and make more $$$$ for yourselfs. This was a great learning experience for both of you.
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"
I just want to say that now after both closings, eveything has worked out great. This was a win/win and it really was a great learning experience. I don't think I could've done it if it wasn't for all the great people on this site. I now have a better understanding of hud properties and I am learning more and more thanks to this site and the great people here!
This train, Dreams will not be thwarted
This train, Faith will be rewarded
Big wheel roll through fields where sunlight streams
Meet me in the Land Of Hope And Dreams
Bruce Springsteen
Jeremy
Did you actually wire the funds to Jason or to the title company? How did you get your funds back...from the title company?
I am just curious as to how this works in a situation like this. Congrats again!
Sissy
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"
This would be the same transaction that coastal funding would have done.
Funds are all wired to title companies. Buyer/Seller never touches funds.
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote
Yes, all the funds were wired to the title company. I am so glad everything worked out and I am looking forward to working with Jason again.
This train, Dreams will not be thwarted
This train, Faith will be rewarded
Big wheel roll through fields where sunlight streams
Meet me in the Land Of Hope And Dreams
Bruce Springsteen
A job well done guys. That's just awesome.
and what a great cooperative effort between "strangers" no less. How awesome!! (I'm a little late on this post but after attending a RE meeting last night where I was learning more about HUD I was searching for more information.)
Jason--Congratulations for your persistence! I would love to talk with you about your experience with this. I am assuming you use an agent on this deal, correct?
The one negative thing I learned last night related to something else I am looking into is that you cannot purchase a HUD home if you have a license..correct me if I am wrong. However, I was also told HUD pays agents quite well to sell HUD homes so that is the positive side..
Can anyone point me to more threads or experiences with HUD? Thanks and Congrat again to Jason and Jeremy. Kate
"Whether you think you can or can't, you are probably right" Henry Ford
Congratulation to you both! I was quite surprised that the bank wanted their money transfer the day before closing, but i guess things have really changed. Nothing comes easy and after all, you both have learned a great deal and i think we are all learning as well. Once again, congratulation!
lloydsap