Investing in Probate Real Estate

Investing in Probate Real Estate

by John P. Myers

Probate is the legal process of someone passing away. It is the distribution of assets of an estate to the heirs after all debts have been satisfied. Many times, these estates contain real property and have to be sold to pay off these debts.
When a person passes away, a Petition for Probate is filed at the County Courthouse and a Personal Representative (PR) is appointed. The PR is the person in charge of the estate. They are given the task of liquidating all personal property, paying off debts and distributing what is left to the heirs according to the wishes of the deceased.

In many cases, inheriting a property can be a burden. There are estate taxes that need to be paid, repairs to the property need to be made, and maybe a mortgage. Adding to this burden is, many times, the PR lives out of town or even out of state. The PR not only needs to sell, but wants to sell because it is a hassle dealing with a property that is far away.

There are a few ways to find probate properties in your county. Once a Petition of Probate is filed, it becomes public notice and must be published in order to notify the creditors. If your county does not have a daily legal notice paper, you can go to the courthouse or on line to research the files. The most important data you want to gather from these notices are: the case number, the attorney in charge, the name of the deceased, if there is real property, and the name and address of the PR.

Once you have determined there is real property, you need to contact the PR. Send out a letter and maybe follow up with a postcard. You can also call them. The telephone number may be on the legal notice or you may find it by doing research on the internet.

Once you have made contact with the PR, find out if they are interested in selling the property. Remember to tell them, as you should also state in your letter, that you will buy the property in its "as is" condition and that you can close the purchase quickly. If they are interested, make an appointment to see the property.

Now that you have met the PR and seen the property, it is time to make an offer if it meets your criteria and is the type of investment property you are looking for. You want to buy at least 30% below market value. This will usually cover all your costs, rehab work, and profit. Depending on how much work needs to be done, and how much profit you want to make, you may have to adjust that number. If the PR accepts your offer, get it under contract.

As you can see, it is pretty simple to find probate properties, especially now because many counties have their information available on the internet. Find out if there is real property and contact the PR. Remember, every PR is not going to respond. But if you stay persistent with your mailings, they will start calling.