Dear Investor,

In case you haven’t heard, HUD is finally getting real and making deals. (For basic information about this government agency, click on the HUD Homes tab.) I don’t know if they need to unload inventory because they are about to start refinancing subprime borrowers, or what. I just know they are unloading inventory. Combine that with increased foreclosures and fewer qualified owner-occupant bidders, and it all adds up to more (and better) deals for investors.

Several of my clients are currently taking advantage of this situation to pick up properties at bottom dollar. Here are a couple of recent examples (not in war zones):

Case# 491-839172, Irving, tax value $112,350, list price at time of bid $81,680, winning bid $62,185 financed with hard money. That's 55% of the tax value.

Case# 491-708662, Garland, tax value $77,470, list price at time of bid $55,200, winning bid $41,500 cash. That's 54% of the tax value.

Maybe you tried HUD bidding back before circumstances changed, or maybe you’ve shied away because you assumed it would be too much hassle. The truth is, buying from HUD is a lot simpler and quicker than buying from most banks. The bidding is online, there’s no 20-page addendum to fax back and forth, the results are announced quickly, there’s no second-round call for "highest and best" offers, and an extensive property condition report is available for your review.

WHAT IS THE PROCESS?

Because there are so many properties, in such scattered locations, and the number of interested investors keeps growing, the most equitable and efficient process to meet HUD’s bidding deadlines is to follow these procedures:

1. Please drive by the properties you are interested in and look through the windows. This step is optional but highly recommended.

2. If you want me to place a bid in your name, send me the following items/information (if you haven’t already provided it):

Address of the property you are interested in,

A lender's letter showing pre-approval for a loan up to your maximum sale price, or

A bank statement showing cash available up to your maximum sale price,

Name in which title will be taken (individual or company),

Individual SSN or company EIN,

Purchaser’s address,

Purchaser’s telephone number.

3. Once I have the above items in hand, I will place the bid. Bids will be placed on a first-come-first-served basis.

4. If you win the bid, I’ll meet you for an interior inspection (utilities will be off).

5. If you decide to go ahead, I'll need a cashier's check payable to HUD for $1,000 earnest money if the price is over $50K, or $500 if $50K or less.

6. Once HUD signs, you have 45 days to close with financing, or 30 days with cash. HUD will pay my commission.

IMPORTANT – Tell your lender (if any) that his/her letter:

Must be on letterhead,

Must be dated within 30 days of the bid date,

Must be signed by the loan officer,

Must state that credit has been reviewed and approved,

Must state that an application has been made (either oral or written),

Must state the loan amount (or up to a sufficient amount), and

Must include the name of the purchaser (individual and/or company). The bidder's name must match the name on the lender's letter.

I don’t know how long HUD will keep this window of opportunity open, so if you’re interested in getting your share of the profits, please enter "Include me" in the Comments space at right. Then fill in the other blanks, click OK, and get ready to receive more than enough prospects to reach your investment goals, which you soon may need to raise!

Your Partner in Profit,

Dick Hoffman, Realtor