What You Should Know About Probate Investing

You may have heard the term “probate investing,” but if you’re like the majority of real estate investment professionals, you may actually have shied away from the REI niche. One reason many folks ignore this highly profitable arena is that they may not understand what probate investing is all about. Here’s a quick run-down of what you should know about the lucrative profession of probate investing.

When a person dies without a will or a living trust, their estate is placed in probate so that creditors can be paid and assets can be transferred to their heirs. Typically, probate is a time-consuming ordeal that can run on for several months and take a huge emotional toll on family members who are already grieving.

Since real estate is typically the largest asset, it’s the real estate that will most often be sold when an estate must be settled. While the process should be simple, the amount of time involved and the emotional wear and tear on the family can cause a great deal of stress. Often the estate Executor is a family member or close friend which makes the whole issue of dealing with probate a headache, especially in light of their own loss.

Assets must be located, appraisals must be made, and disbursements to heirs and creditors must be made—all on a sometimes stringent timeline. Sadly, there may be little help for the Executor which adds even more stress to the mix.

While there are laws and regulations regarding the sale or purchase of probate property that must be followed, depending on the state of the probate, approaching an estate’s Executor with an offer to purchase a property in probate has opened the door to many lucrative REI deals that may not have been found otherwise.

Because an Executor in a position to want the quickest sale possible to get probate property disposed of, you can offer them peace of mind by buying the property as soon as it becomes available. The threat of a property being vandalized, requiring maintenance and more often prompts an Executor to settle on a probate property deal much more quickly than they might in another situation. And that’s to your financial benefit as the REI professional handling the purchase.

Because probate investing doesn’t involve a blind purchase like a foreclosure, or a distress sale, which means the property could be in pretty rough physical condition, by investing in probate properties you can typically find real estate that’s in great condition at the price you might pay for a foreclosure.

Probate investing is ideal if you’re looking for properties to buy and flip in order to make the most profit. Simply watch for probate filings and approach the estate Executor to see if a deal can be reached. You’ll be amazed at how much you can make much more quickly than you can in other areas of real estate investing.