Most people are discouraged from investing in the real estate market because think they that it will be a massive up-front investment and some people just don’t happen to have the means to get started in the business in all seriousness. But thankfully, there’s not a lot to worry about because if you happen to have a smaller budget then you can consider investing in the probate real estate market.
So what exactly is the probate real estate market? And how does anyone go about investing in it. We shall answer all such questions in this piece, so just stay with us till the very end.
For starters : What exactly are probate real estate properties?
A probate property is actually a property that is left behind by a deceased person. If the deceased person was the only owner of the property and if they died without leaving behind a will, then such property will go to probate. ‘Probate’ is the actual name of the court process which is used for distributing the holdings of the deceased. Once the property in question goes into probate, then the court can either appoint an executor or they can also oversee the probate sale of the property by themselves.
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Now, let’s come to probate real estate Investing.
It has been seen in most cases that the appointed ‘executor’ who is the closest living relative of the deceased has a couple of incentives to sell the property because either they might no longer intend to live in the property or maintain the same. It can be these two reasons or other reasons as well, but if and when this happens, then the probate property is put up for sale and it automatically becomes a great opportunity for real estate investors because if they play their cards right, they can actually buy some really valuable properties at throwaway prices. This is because most sellers in the probate market are highly-motivated sellers and often such sellers end up selling properties at way below the market value because they intend to get rid of the property as soon as they can.
Why are sellers in the probate real estate market so ‘highly-motivated?’
One of the key incentives for the ‘heir’ or the ‘executor’ to sell the property quickly is to avoid paying taxes on fees on the sale. Because of a combination of these reasons most probate properties are priced in a way to attract a lot of attention from buyers to the effect that such properties can be sold off as quickly as possible. Most probate properties have no outstanding mortgage on them and thus they become really get investment options for people who might want to buy them for the purpose of fixing or flipping them. Further, probate sellers have little or no emotional attachment to the property and thus they really are not inclined to negotiate for a better deal.
Here’s how investors can find probate real estate properties to invest in
- They begin by contacting their local probate court because most probate court in different counties tend to have a long list of all open probate cases and you can easily review them in person and even online.
- If the visit to the local probate court didn’t reap the results as you would have liked, then you can resort to dedicated web searches to find the best probate properties in your area.
- Check your local newspaper because many county clerks often publish notices of forthcoming probate sales in the local newspapers
- If none of the above options work to your satisfaction then you can consider buying probate sale leads from one of the many companies who sell it
Wrapping Up – Know the risks before probate real estate investing
All that being said, one must note that probate real estate investing is not entirely bereft of risks. Before real estate investors begin gearing up for probate real estate investing, they must know that the entire legal process of transferring ownership can easily take 9 months and can even take several years if the beneficiaries are not on good terms with one another and if they want to bring in complications then they actually stall the legal process indefinitely. Another point that investors need to know that most properties will be sold as they are and this might make renovations quite expensive. But all that being said, if probate real estate investing is done well, then it can prove to be a win-win situation for all parties involved. Your ability to find the properties and time your move to a nicety can reap your rich rewards in probate real estate investing.