When someone dies without a will, their property goes into probate until it is distributed to the heirs. Sometimes the heirs live out of state and they don’t want the burden of another property. In some cases, the property is in terrible condition and the heirs just want to sell it quickly. There is a lot of money to be made in investing in probate properties, but the difficult part is finding them in the first place. Read on to learn about the benefits of investing in probate properties.
The Owners Are Motivated To Sell
Owners of probate properties are often very motivated to sell. They might not want to take on the hassle of keeping the property and they are willing to sell at a lower price just to get the property off of their hands. Keeping the property can cost the owner money and they will need to insure it and pay the taxes once it is theirs. They are also going to have to deal with the repairs.
If the heirs keep the property they have to fix the property up and they also have to rent it out or move into it. You can’t just keep a property empty. Renting the property can also be a hassle for the heirs. They have to pay money to hire a management company or they have to deal with renting the house out themselves and the hassles that come with it. They will have to collect the rent, evict tenants if they don’t pay, and make repairs. This can all be a lot of work and heirs might not have the time to deal with it.
Negotiating The Price Is Going To Be Easier
In many cases probate properties need a lot of work. Many of them have deferred maintenance since most older people don’t want to renovate their homes or do maintenance projects that can be put off since they don’t know how long they are going to be around to enjoy the changes. They might only do necessary repairs which means that there is going to be a lot of work to be done to get the property into a condition where it can be sold.
All of the repairs that need to be made means that you can get the house for a better price and you will make money. You can use every problem with the property to negotiate the price down and you can often buy these properties at a really great price when you are willing to negotiate. You won’t always have to negotiate that hard either. The owner often wants to get rid of the property right away and they will be willing to sell you the home for a great price.
You want the price to be as low as possible so you can make more of a profit when you flip it or re-sell it. If the seller is motivated and doesn’t want the hassle of dealing with the property, you can get a great deal and make a lot of money. Probate properties can give you the opportunity to make a lot of money that you can’t find when you are dealing with more conventional sellers.
Fix and Flip The Property
Once you acquire a probate property you can fix it up and then flip it. You can find investor loans that will lend you the money to buy and fix the property. These loans have high interest rates but they are worth it when you don’t have cash on hand. As soon as you sell the property you pay the loan back and keep the profit.
Probate properties usually need a lot of work and they often have structural issues. You might need to repair the foundation or replace the roof and the plumbing. The repairs are going to be more than just cosmetic repairs and you have to be prepared to take on these additional repairs when you buy a probate property. Make sure you have a realistic budget of what all these repairs are actually going to cost before you buy the home so you don’t buy a bigger project than you can handle.
How To Find Probate Properties
Finding a probate property can be a challenge and you are going to need to get creative to find the property you want to invest in. One place to start are the local obituaries. This might sound morbid, but it is a great way to find houses. Run the names through their county real estate records to see if they own property that you might want to buy and then make contact with the heirs to see if they are interested in selling. Don’t contact any of the heirs for at least a month after the funeral. You don’t want to be rude. Be very polite when you are speaking with the heirs.
You can also find properties by looking through the legal notices that are published in the newspaper. You can contact the number of the attorney on the notice to see if there is any real estate that is going to be sold. You will have to do a lot of research and cold calling when you are looking for real estate but it can really pay off when you find that gem of a property that is going to make you a lot of money. Patience is a virtue when you are looking for probate properties and be prepared to spend a lot of time looking for potential properties.
Investing in probate properties can be a good deal and you can make a lot of money if you choose the right properties. You might decide to fix the property and sell it, or you might try to get the price down and rent the property out. There are lots of different strategies you can take when you are dealing with probate properties and these deals are often easier to close since the seller is motivated.