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Old 05-25-2007, 05:22 AM
 
283 posts, read 1,316,926 times
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You know when the government takes away homes and then resales them to the public. Have any of you had any experiences with this and what would you say? Is this a good way to get rich?
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Old 05-25-2007, 07:56 AM
 
Location: Austin 'burbs
3,226 posts, read 13,342,295 times
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A "good way" to get rich? If there was a "good way" to get rich, I suspect everyone would be doing it.

That said, in some markets, I can imagine you can make significant money, in some (and that "some" is likely getting bigger all the time in the current downturn) you won't.

I think this topic has come up a lot on this forum, recently - search on the terms REO or foreclosure. The opinions are varied on whether or not it's a positive or negative.
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Old 05-25-2007, 09:21 AM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 35,566,816 times
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There are no circumstances of which I am aware that might make one "rich" by dealing with HUD or other gov. owned housing.

Well maybe one way...you sell seminars or programs to the uninformed as to how to get rich off gov foreclosed housing.

First HUD houses are generally bottom of the pile. They are in bad neighborhoods, old and in bad shape. Not always....but mostly.

When a nice home comes up on the HUD list guess what...it then sells for more than its fair market price to some guy who attended a seminar and is going to get rich off it. He fixes, paints, carpets and then tries to sell. Eventually he loses 15% of what he paid for the house to get out from under.

There are some specialists who buy bad HUD houses, do minimal fix up and then rent. Can work in disadvantaged neighborhoods. You out to become a slumlord?
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Old 05-26-2007, 12:08 PM
 
28 posts, read 116,188 times
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Some of the HUD homes in our area are really nice, in good areas, and close to move-in condition needing only quite minor repairs.

However, because HUDs are purchased through a bidding process where the government takes offers for a period of time, the best homes are usually bid up to a higher price, just like any good item at an auction.

And, when a house goes up for sale through HUD, they are available ONLY to owner-occupying buyers at the beginning, so anyone who wants to buy as an investor who will not be living there can't have the first crack.

As far as VA-sold homes, they are a cross between a foreclosure that is bank-owned where offers are taken as they come in, and a HUD style bidding process. The VA will start and end a number of "simultaneous periods" where they will collect up offers and then consider the best one at the end. Then you have to use their forms to do it...

There's a little more to all this, but -- the main point is, no matter what, there is usually a "price" to pay somewhere to get a bargain on a home -- whether that is dealing with the cost of rehabbing, a bad location, competition that drives the price back up...and so on. Truly sweet deals tend to be a little harder to find if it's quick-turn profit you're looking for.

But, yep, maybe renting them out would work as olecapt says. Do your research.
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