A fewer things are more certain in life than death. It s appointed to man to die and after death is judgment. We will deal with the after death experience in another book. Here we will dwell on what happens to an individual s real estate after he passes on. Tour any part of America, the vastness of it, and no matter where you go you will see real estate. As hidden as we make death in America, it occurs every single day. It happens to the best of us. To the old and the young. To the rich and the poor. To those who own millions and to those who own nothing.
We want to talk about those who own. Naked we came to this world. Naked we shall return. It s that simple. Call it cruel but it s the fact. What happens when we die and leave our assets behind? Those things we have worked countless hours for? Those homes we spent years in school to get a job for? The houses we called our homes and decorated them to fit our taste? What happens to our commercial properties when we are no longer here?
Well, you will be amazed at the number of Americans who do not have a will. When a homeowner dies and did not leave a will his assets and debts are administered by the state, who appoints an administrator. The administrator s role is to make sure that the decedent s creditors are paid off out of his estate. If the decedent has property, the value is assessed and if there is equity in the home the property is sold and the proceeds are used to pay off the debts.
While a large portion of decedents do not leave behind a will, a good number do. The will states who the heirs are and who should be appointed the personal representative or executor/executrice when the decedent is no longer with us. The will lists all real estate and any valuable personal property that was owned by the decedent. As morbid as this may sound, specializing in probate real estate investment is a very profitable field.
Just like doctors and morticians make money taking care of us in our final stages of our sojourn here on earth, you the investor can equally profit handsomely buying and selling probates. We know, for sure, that the way to create wealth in real estate is to target motivated sellers. We have talked about this at length. As funny as it may sound decedents are the most motivated sellers. For one thing, they have passed on to a different world entirely and none of the things of this world pleases them any longer. You want to take their property? Go ahead. It s all yours. Your only caveat is that there is the government and the heirs to deal with. Probate investing offers three main areas for you to profit from, the first of which is real property.
Often times, probate is not listed on the MLS, which minimizes the exposure of the subject property to the general public and therefore lessens competition. Probate investing also offers you the opportunity to invest in personal property. As you may know, most heirs may not have the time, interest, patience or stamina in digging up old memories of their loved one s personal belongings. They may see one or two things they may like to keep but other than that they generally are not interested in sifting through all the personal items to look for hidden treasures. This is where you the trained probate investor may benefit. You will be able to search for clues and look for those valuable items. It is not uncommon that we humans keep things to ourselves. The decedent may have had gold stored somewhere in a dresser and never told anyone about it. It s your duty to discover this hidden treasure.
If you recall, I did mention that there are three ways you can make money as a probate investor. I have discussed real property and personal property in the last paragraph. Now, I d like to introduce you to a third way. This is inheritance brokerage. You may not be interested in buying probate real estate or looking through dozens of items to find the hidden treasure. However, you may be interested in making money through inheritance brokering where you simply help beneficiaries receive part of their inheritance in cash up front rather than waiting for months for the estate to be settled in probate court. You get paid for matching these beneficiaries with the funding sources. How to Get Started in Probate Investing Okay, I have told you can make money investing in probate. How do I get started? You may be wondering.
Well, start by Making friends with lawyers that specialize in probate and you will find that you have more properties than you can possibly handle. In many cases, heirs are not interested in moving into a property that their relative left behind. Some of these heirs may already be married and own their own homes. A lot of them may even reside in another state and have no interest in keeping the decedent s property. Lawyers are the best way these heirs dispose of the assets of their deceased loved ones. Another way to become a savvy probate investor is training. You can attend seminars such as those hosted by JG Banks Institute. This company has been around for many years and is considered a leading expert in the field of probate investing. The Internet, by far, provides the best resource for you as an investor in this arena. It is where you go to look for probate lawyers and trainers. It s where you go to search for probate details using case numbers. It s where you can locate a local newspaper specializing in legal issues such as probate. It is where you find blogs and others like you who are investing in probate investing.
An email hit my inbox. As soon as I read it, I contacted the person at the other end almost immediately. He told me that he was an investment banker residing in Napa, California. His mother had passed away and had left behind the small house he grew up in. The house was located in a so-so neighborhood in Sacramento. He said he just wanted to get rid of it and put that chapter of his life behind him. Obviously, he missed his mother dearly. I asked him how much the house was worth. A realtor told me it s worth about $48,000 now, he said. However, with some minor fix-up, he said it could be as high as $80,000 . I asked him how much he d take if I offered him cash and closed in 7 days. He said he d take $25,000. I put together an offer that night but instead of offering him the $25,000 we had agreed to I wrote $21,500. I sent the offer to him and called him soon after. He asked me why I had reduced my offer. I factored in the commute time and the expense thereof from the Bay area to Sacramento, I answered. He said he d let me know. Later on that evening I called him back. He said someone else had bought it and was ready to close right away.
What a blunder! I moaned. I could have tied up the deal and even be able to resell it right away and made $10,000 or even more without even spending a penny. Or I could have visited the home, looked for hidden personal treasure, fixed up the home and sell both the valuable personal property as well as the real estate and made some good money. The very first probate I got involved in was soon after I went through the JG Banks seminar in 2007. A single woman in Newark, California, had passed away and left a property behind. In her will, she appointed a friend of hers, who resided in Fremont, as her personal representative. I approached PR and told her that I was interested in the real property her friend left behind. She told me that the property was currently occupied by tenants and that the lease would be up in April the following year and that I d be more than welcome to come back then to discuss the possibilities. As you can see from these two examples, probate investing can be the easiest form of investing. Unlike in other real estate investing types, there may be very little competition and the sellers are pretty motivated.
The probate process for the personal representative may be complicated but for you the investor this does not have to be the case. It can be as easy as simply hooking up with a lawyer who specializes in probates in your area. He can be the source of these properties and will direct you as who the personal representative or administrator is to whom you can make your offer. Your local legal publication may carry case numbers for new probates. You can research these cases online or at your local probate court. Study the documents and look for will and the executor. Contact the executor. Don t come across as overly interested in the estate of the decedent. Use the golden rule.
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