Uncover the “mysteries’ of probate – an often misunderstood yet great source of leads that is virtually untouched! Join us for a short but informative webinar, during which we explain what probate is, and how you can profit from this never-ending niche of leads. We will actually review cases online to demonstrate the power yet simplicity of probate.
Some of my students had some additional questions that I thought many of you would benefit from so I’m posting them today:
Always be networking – When you build a network of probate / real estate attorneys that are consistently referring you business, you have it made. Sit back and cash checks the rest of your life. Do you understand the power of this? Sell yourself to every single probate attorney you come in contact with. Here is what to say
The Fast, Easy, Simple and Profitable Way to Wealth
Do you want a ready-made market of motivated sellers who often sell at a deep discount — a market where you’ll have little to no competition at all? Probate real estate investing is the easiest and fastest way to find deals and a get check. I think it’s an ideal way for the beginning investor to make money when you combine this with the concept of “quick turning.”
WHAT IS PROBATE?
Probate: is the official proving of a will authentic or valid in a probate court
When a person dies, their estate – all their worldly belongings – often goes into probate court, where a judge appoints a Personal Representative (a.k.a PR ( Executor)) to oversee its administration. It is the PR’s job to make sure that the belongings are divided fairly and according to the decedent’s wishes. Depending on the state, the judge may also give the PR different levels of power.
Probate is the process of distributing the assets of an estate after the creditors have been satisfied. One of the primary functions of probate is to transfer the title of the decedent’s property to its proper heirs. Of course, the government wants the estate to pay any taxes that the deceased still owes first.
After the expenses are paid once all the decedent’s property is sold, the people who have inherited anything from the person who died, divide up the remaining money.
However, what often happens is attorneys get involved and then the process becomes complicated and expensive.
Why Are The Owners Of Probate Property So Motivated?
In many cases, when an heir inherits property, they inherit a burden. There are estate taxes to be paid, repairs that must be made, in some cases, a mortgage or second mortgage must be kept up to date. Add in the fact that there are often multiple ‘owners’, and many of them may live far away, and you have a situation where selling the house is the best, and sometimes the only option to make sure that everyone gets their fair share of the estate. Ready cash may be more important to them than any other factor. People who inherit the estate want the money and not the house, they will often take a quick sale at a discounted price.
There are some other reasons why I love probate investing…
It’s one of the easiest ways to find properties at less than 70% of market value, do a little fix-up and sell at market value; you will make lots of money.
The other reasons:
Little Seller Resistance Very Easy and Simple High Response Rate
Are you starting to see why probate properties are so attractive?
Here is an interesting deal that illustrates the mechanics of probate or estate investment home purchases.
The Seller (I’ll call him Dave) co-owned this house with his mom, and both had signed on the loan. Unfortunately Dave’s mother died three years previously. Dave allowed the sister to live in the house, but she did not make the mortgage payments which were now 6 months in arrears. Dave is tired of dealing with the house and is ready to sell. But when he and his mother bought the house, they did not purchase with ‘joint rights of survivorship". Had they bought in this manner, if and when either died, total ownership would have passed immediately to the other person.
To complicate matters more, Dave’s mother left no will for her estate with six other siblings all awaiting their share. If that’s not enough of an investing adventure for you — the bank is threatening foreclosure so time is of the essence to create a deal. In fact, the bank is not just threatening….the house is scheduled to go to the courthouse steps in three weeks. Why would anyone even try to purchase a mess like this with a short time frame? Well, Dave owes $33,000 + $5,000 in back payments. The house just needs cosmetic repairs totaling no more than $10,000, and the house will have a market value of about $140,000.
That leaves approximately a $92,000 margin less expenses until the property sells – definitely worth pursuing as an investor! So lets investigate further
The estates of the elderly, their finances, medical situations and their property are often abused. A
Purchasing Property From a Decedent's Estate Frequently, the property of a decedent is sold rather than distributed to the heirs. There is sometimes a need to raise cash or pay taxes, or, more often, property will be sold so that the sales proceeds can be split among several heirs. In any event, estate sellers are often very motivated to sell, and motivated sellers can mean bargains to careful buyers.