Success with a HUD Repo

I am not sure if you would consider this for your “Success Stories” or not but, if nothing else, I wanted to write it as a “thank you” to you and all the inspiration that I have seen on this site. I have been silent for the most part for the past two years or so, but I read all the messages on the Main Forum at least every other day. I have asked a few questions, and have always learned from the answers.

To give you a little background, I currently live in a duplex and rent out the upstairs. The upstairs rent is paying for the lot that we bought in August, that we hope to build on sometime next year. I have two other duplexes that I own with a partner. The first one, we both put up 10% to purchase, nothing creative at all.

The second duplex we bought, my partner put up all the money for the down payment–nothing out of my pocket. I was learning at that point from this site. I do all of the book work, etc., so she is willing to contribute to the financial part.

And that brings me to the part that I consider to be our biggest “success” so far….

In January, I found a repo that was being offered for sale through HUD. The single family 3-bed/1-bath was within 3 blocks of both of our current rentals. I had never dealt with a HUD home before, so every step was brand new to me and, for the most part, very confusing.

Over the next few weeks, I personally made about three offers for the house. Not one was accepted. I also saw on the HUD website that there were others bidding on the house. I figured that if I bid any higher, I would be too high to make anything on the house, so I forgot about it and moved on.

In November, I was looking at the HUD website to see if it had ever sold. It hadn’t. Not only was it still on the market, but it was reduced lower than my previous bids! I couldn’t believe it. I made another bid, and another. Finally, they called my Realtor and told her what my bid needed to be to get the offer accepted.

HUD accepted my offer at $32,500 which was $3,500 less than the $36,000 offer I had made earlier that year. I just signed a lease option on Sunday January 30, thirteen days after we closed on the house, for $50,000 with a $500 allowance for some repairs. We are going to close in about six to eight months.

We are holding $1,000 option money, plus $50 per month that we have the right to keep if they cannot close at that time, for our own security. The way I figure it, we will gross approximately $16,000 at closing.

I am very exited about real estate investing and have been very happy with what I have done so far. By no means am I going to be able to quit my JOB in the near future, but I want to keep learning, keep buying, and hopefully in a few years (with the things I have learned and what I will learn from this GREAT site) I will be able to consider myself “self employed.”

Again, THANK YOU, all of you for your help, ideas, and inspiration.