Investing in real estate is a lesser-known investment opportunity

Investing in probate involves buying probate property. Probate is the process used to inventory and distribute assets owned by someone who has died. Depending on the complexity of the estate, the probate process can last anywhere from six months to three years. During this time, the estate is responsible for maintaining the property and paying mortgage payments, utilities and insurance.

Investing in probate real estate gives real estate managers the opportunity to sell real estate to owners. This is particularly useful for administrators who are finding it difficult to pay mortgage payments or support the maintenance of assets held in probate.

The first step to probate real estate investing requires a visit to your local probate courthouse. When property is probated, it becomes a public matter. Most of the information about the estate can be found in the testator’s will. Generally, a will will name an executor of the estate and describe how the deceased wishes to distribute their personal belongings and financial assets.

If an heir dies without making a will (probate), the probate records will indicate who has been appointed to administer the estate. As a rule, this is a direct relative. However, if the decedent has no living relatives or no one accepts the position of administrator of the estate, the probate court appoints an outsider to administer the estate.

Once the administrator’s contact information is located, the next step requires searching the records to find the real estate that is held in the decedent’s name. Deed records record land ownership and transactions. When transferring or selling real estate, a new deed is recorded. Deed records show if there is a mortgage on the property. If so, the estate is obligated to support the payments throughout the term of the will.

If there is a second mortgage on the property, it is likely that the heirs will need to sell the property to pay off the debt. The property administrator is authorized to make decisions regarding the sale. However, if there are multiple heirs, they must all agree to sell the property held in the will. In some cases, the estate may need permission from the probate judge to sell the property.

After compiling a list of potential estate transactions, investors will need to contact the executor of the estate. This can be done by phone, mail or in person. When contacting the property manager, investors should be respectful and express their sincere condolences.

Most estate administrators and beneficiaries are unaware that they can liquidate an estate during the probate process. An offer to purchase their property can solve their financial problems and provide investors with instant capital in their investment. Often, real estate can be purchased well below market value if heirs need immediate cash.

Investing in real estate does not require special training. However, investors involved in the purchase of probate assets must have good communication and negotiation skills, as well as a sense of empathy.

Investments in heritage properties offer many opportunities for good deals. While it does require a bit of detective work and negotiating with distraught and distraught heirs, when done right, estate inheritance deals provide a win-win situation for all parties involved.

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