Understanding Probate And Making Money In Probate Real Estate
Probate properties are some of the most profitable real estate investing deals. Several factors make them especially attractive for investment. Here is how you can make money investing in properties. You can find some of the most profitable real estate investing deals in probate real estate.
They are especially attractive in real estate investing because of several reasons. This article walks you through how to make money in probate real estate.
Probate properties are properties titled to a person who is deceased. Beneficiaries or heirs inherit probate properties once a person dies.
The probate process involves clearing the outstanding debts and releasing the remaining to the heirs. For example, a house in probate may be sold, the outstanding mortgages cleared and the rest distributed to the beneficiaries.
The estate is responsible for all expenses such as cleaning the yard, utility bills, maintenance, etc. Probate property can therefore be a source of distress.
The court appoints an administrator (executor) to settle the estate. An attorney is the most common administrator. In some estates, you may find one of the heirs has been 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.
If they sell through a real estate agent, the estate will be responsible for all real estate commissions. Selling to a real estate investor will minimize these costs for them.
Sometimes they need to fix the house before they can sell it. If they cannot afford repairs, then a real estate investor may be the best buyer for such a property.
How to locate probate properties
All probates are recorded in the county court records. There are 3 sets of important information: The deceased, the administrator and the beneficiaries.
When investing in probate real estate, you must periodically check court records for new filings.
You then need to check if they own real estate from the county court records. Start with the name of the deceased. Sometimes, the property may be in the name of the estate, such as John Doe Estate.
Finding outstanding debts 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 also helps in case you do not have the correct mailing address.
In probate real estate, you do not send I Buy Houses post cards. 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.
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