Whoesale HUD Home Questions

Has anyone wholesaled a HUD home before. HUD is asking me to give an EIN just to present an offer. I would like to create an llc just for the property and sell llc to my end buyer. The problem is if I create an llc to get an ein number I wasted 200 bucks if they dont accept my offer. Problem 2 if I put offer using my personal llc that I do not wish to sell how do I close. I have never done it that way, so im curious to see your opinions.

Also, they do not give an inspection period if your offer is accepted you lose your earnest money deposit if you you do not close PERIOD. No way to back out. HUD agent said never has seen them give back deposit only once when oil tank was found leaking.

Thanks for you input looking forward to here your opinions.

Shawn Yezza

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Replies

  • Hi shawn im frank from ocean county there is another option here. Get the house under contract find your end buyer then tell them you would like to add your partner on this deal. Then he pays for closing and afterwards you quit claim your interest in the house over to him for your wholesale fee. Hope this helps.
  • Double close to avoid selling the LLC.

  • shawn,

    Just make the LLC. Heres the worst case. you now have 123 main street LLC. You dont get the deal and now have the LLC just sitting there. On the next offer, use 123 main street llc when submitting the offer on the property located at 456 south street. You are looking too much into the name.

    Yeah HUD will  not allow for assignments, but when you sell the llc you are not assigning the contract. The llc is still going to close on the deal as originally structured, only thing that changes are the members and thats not a problem.

    If you put in under you company name LLC then yes you will have to actually buy it then sell it. Just make the new LLC for the little money. at some point you will use it and i will guarentee when you do it will be for a lot more than $200.

     

    Dont over think it, thats what stops the majority of people from doing a deal. Dont be scared to mess something up as you will learn from it, but you will be active and your confidence will skyrocket versus not doing anything. When you cash a 5K,10K, 20K check or whatever, trust me you will laugh at the thought of you worrying about the $200 LLC

     

    Hope that helped

     

    Tomorrow is the REO/HUD workshop, hopefully you will be able to attend so you can get a more in depth understanding of the process.

  • Shawn,
    It's going to be a pain to deal with HUD as their primary remit is to enable low cost housing, and they really don't want to look after investors, much less wholesalers.


    Wish you good luck but I would be surprised if you can make it work.

    let us know if you can, might be a first.

    Adam

  • Shawn:

     

    It's my understanding HUD will not allow for assignments.  You will have to double-close the deal.  AND with that, you will need to make sure you are able to use YOUR title company, otherwise, the HUD's title company will NOT allow the transaction to happen.  If your offer requires an EIN number, ask them to include an addendum in the P&S Agreement that states you are entitled to your earnest money and cost of incorporating if your offer is not accepted.  The easier route to this would be to have the HUD agent agree to the purchase price before any further action is taken.  If he cannot agree to that, then this deal is not worth the headache and move on to the next one.  Sometimes, the deal is just not meant to be.

    Good luck!

     

    Jay

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