How can I get started in buying foreclosures/hud properties without a lot of money saved up?

Question

My husband and I would really like to get into buying foreclosed, pre-foreclosed, and hud houses to flip them. The problem is- we already have a mortgage and only have about 10K in the bank. I've heard that you have to have cash to buy auctioned homes. Are there foreclosed homes you can get a loan for? I'm just learning about this so any advice about how we can finance this would be greatly appreciated.

Answer 1

Reality check. You can't.

You need access to funds, either your own or the bank or hard money lenders. Houses cost money.

Your only other option is to swing some owner financing deal, where the owner is essentially your lender.

Answer 2

Forget about HUD. It takes all cash and/or rehab work (unless you flip them). You can look at their property by following the links at www.hud.gov. Don't get me wrong, nice place to look for money, just not with 10k.

As a beginner, I suggest you look into something called "assignable purchase option contracts". Basically you locate and tie up pre-foreclosure property and then sell the contract for some amount of money. Depending on the negotiating, you can make anywhere from 5k to 100k per contract. I negotiate assignable purchase contracts for a 1 dollar option fee and then let the new buyer pay the owner off. You don't need credit or money (just a dollar to make it legal).

Once you get around 100k (or whatever the average price to buy a loan is in your area) saved up, then you can use that money to get involved in something called "short sales" and make even more money. This is the stage I am in. My next step is to tie up commercial property and apartment buildings, but I like helping out people, so I might just stay with single family homes.

Good luck

Answer 3

I suggest you to flip your first house and use the profits to buy a another one and flip it again and keep doing it until you have enough to buy two houses.

You will have to move from house to house for a while but eventually you will have enough money to buy two houses (One to live and one to flip)

Obviously you need to focus on your first house for now and pay all the debt to the bank so you can flip it.

You cannot start a used car business with $10,000.00 if you consider each car costs $2,500.00 let alone a real estate business with each house costing more than $100,000.00

In some cases you will have to pay more than $10,000.00 just in lawyer fees, court fess, paperwork fees and many other expenses.

I suggest you to cut your current expenses in half and increase your current savings to $20,000.00

I also suggest you to open a brokerage account in Scottrade to invest in the Stock Market with the help of a Portfolio Manager like myself or a Financial Advisor.

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Answer 4

I'd say go to your library and check out the real estate section. There are all kinds of books on the subject. Read, Learn and go get em!