subject: How To Profit From Probate Real Estate [print this page] How To Profit From Probate Real Estate How To Profit From Probate Real Estate
Probate properties are some of the most profitable real estate investing deals.
They are especially attractive in real estate investing because of several reasons. The following is a brief summary of how you can make money in probate real estate investing.
Probate properties are properties owned by a a dead person. Beneficiaries or heirs inherit probate properties once a person dies.
During the probate process, outstanding debts are settled and the balance released to beneficiaries. For example, if there is property to be inherited and some uncleared mortgage, the sale of the house will pay any outstanding debt and the balance goes to the beneficiaries.
During probate, all expenses still need to be taken care of by the estate, such as cleaning the yard, utility bills, maintenance, etc. The property can therefore cause distress to beneficiaries.
The court appoints an administrator (executor) to settle the estate. Usually this is an attorney. One of the beneficiaries can sometimes be appointed as the administrator. This especially happens because the beneficiaries want to reduce attorney expenses.
Beneficiaries therefore need to sell the properties fast to reduce expenses.
The estate will pay Realtor commissions if they sell through a Realtor. They can minimize these if they sell to a real estate investor.
Sometimes it is necessary to fix the house before it can be sold. If they cannot afford to fix it up, selling to a real estate investor may be their best choice.
How to locate probate real estate
County court records record all probates. There are 3 sets of important information: The deceased, the administrator and the beneficiaries.
You must periodically check court records for new probate filings if you are investing in these properties.
You must then verify if they owned real estate from county recordings. Start with the name of the deceased. It could also be recorded in the name of the estate, e.g. John Doe.
Finding debts owed by the estate is also important. If this is not possible, I usually get this information from the beneficiaries or administrator.
Next, contact the administrator AND the beneficiaries. This is because the attorney can be replaced by one of the beneficiaries. This is very common.
This can also be helpful if you do not know the correct mailing address of the administrator.
You do not send postcards. I usually send a series of nice, sympathetic letters every 30 days for 6 months. I always start by giving condolences for their loss and expressing interest in buying any real estate if it is on sale.
They will contact me when the time comes to sell. Then I'll close the deal.
Follow the same steps to make a lot of profits in probate real estate.
