What Is a Probate Sale and Should You Buy It?
If you’re interested in flipping houses, you need to know about probate properties. But before you search for probate real estate listings, understand how probate investing works first. Here’s everything you need to know about a probate sale and if probate properties are worth buying.
If you want to get started with investing, real estate can be a good place to begin. The problem is that real estate investing can be expensive, making investing difficult for those with limited funds.
Fortunately, there are ways to keep your real estate investment costs manageable. One way you can do this is with the help of probate investing. This type of investing allows you to buy homes of deceased owners below the market value. You can then renovate them and sell at a profit.
If you keep reading, you’ll learn more about probate investing, how a probate sale differs from the ‘normal’ property sale and how you can get started.
What is a Probate Sale?
Probate sales take place when someone dies, without ‘bequeathing’ their home to someone. In a situation like this, a representative or even a real estate attorney will need to sell the property. The money from this property will then be spread out amongst the various family members.
Due to the nature of this kind of sale, it tends to mean that such properties are priced affordably. This is like the kind of pricing you would expect with a foreclosure property.
It is worth mentioning that these kinds of sales tend to take longer to close than the average home sale. That is because the sale has to go through the courts.
The homes you get with a probate sale are often obtained ‘as is.’ This is because the seller is not usually under any pressure to do any renovations on the home. As a result, the home may not be of the best standard when you acquire it. Therefore, if you are investing in a probate property, you will need to put some money aside for renovations.
You should also pay attention to the probate laws of your local state before you decide to invest. There may be certain rules you need to adhere to when investing in a probate property, managing transactions, and working with the family members of the deceased.
Finding Probate Properties
If you are going to invest in a probate property, you need to learn how to find listings that allow you to learn more about what is on offer.
One of the easiest ways to do this is by taking a look at your local probate listings. You will tend to find that your local newspaper has a section dedicated to probate listings.
If you are unable to find anything like this, take a look online. Some regions will have websites dedicated to the sale of probate properties. You might even want to take a look at the Public Record Center Website. This website can allow you to search the court records. You can then use this information to find potential opportunities.
You could even consider visiting your local probate court. They will be able to provide you with a list of any probate cases in your region. They might even be willing to give you a document that lists all of the potential opportunities in your region.
Maybe one of the most efficient ways to do this is by developing a relationship with an estate planning/probate attorney. Such individuals are going to be dealing with probate cases on a regular basis.
If you have a good relationship with them, you can ask them to notify you of what opportunities are on offer. The good thing here is that the attorneys will have a close relationship with the clients. This can help smooth out the process. If you’d like to see an example of a probate attorney, you can find out more here.
Making Money from a Probate Investment
Due to the nature of probate investing, you will need to keep a few things in mind if you want to make money. If you do not practice caution, you may struggle to turn a profit.
Firstly, as mentioned, you need to be patient when investing in a probate property. If you are used to quickly flipping properties, you will need to change your approach.
This also applies if you have some tenants that you’d like to move into the probate property. Though it often helps to have tenants already on hand for a normal kind of property, doing so for a probate property can be tricky. The potential tenants might not be able to wait the duration of time it is going to take for the sale to go through.
Because probate properties are also sold ‘as is’ you need to make sure you know some skilled contractors you can reach out to. You will likely need to ask these contractors to do some repairs on the property. It is essential that this work is not purely aesthetic. You should have a survey done on the property to assess its structural integrity.
Depending on how old the house is, you might also want to rewire the entire property. This can help improve safety levels for the next person who is going to move in. Taking this step can also make it easier to market and sell the property.
A New Way to Invest?
Probate investing can be a great way to get your first investment property. But if you’re new to the world of probate investing it is important you know some of the potential pitfalls.
In this post, we’ve taken a look at some of the key things you need to watch out for when investing in a probate property. You should be aware that a probate sale can take a lot of time to process. You also need to remember that the property might not be sold to you in good condition.
There are many ways to find probate properties. But if you want to make things easy, consider building a relationship with a lawyer that deals with cases related to probate properties. They will have a steady supply of ‘leads’ that you can reach out to, if you want to find opportunities to purchase probate properties.
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