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Is Probate Real Estate Investing Beginner Friendly?
By Raleigh Makarechian
If you have not ever heard of in probate properties, you might think that it is just like in foreclosed homes. While both methods allow you to purchase properties at substantial discounts to market value, it is the process of acquiring the properties that is very different. This slight difference in the two methods can be the deciding factor in your success or failure as a new investor.
Where foreclosure is concerned, you will likely be dealing with a distressed or unwilling seller. In this unfortunate situation, the homeowner is likely losing their home due to unforeseen expenses piling up. The homeowner will feel they are being forced out of their home in a most unfair manner. For the investor to be of the most help and for the chance of securing the best possible outcome, the seller will need to leave the home behind. This can be an emotionally draining process for both sides as it is such a life changing time. In many instances, the foreclosure situation is so advanced, the best an investor can do is save the homeowner's credit.
Foreclosure requires dealing with a very unwilling seller and, potentially, a very emotional situation. This method of is not a recommended way to begin any real estate career. For that matter, even if you are a seasoned real estate investor, you should ask yourself if you can handle dealing with watching a family be put out of their home so you can make a profit.
Probate real estate by its nature involves dealing with people who have inherited free and clear properties. They are usually willing
to deal with you to get the property sold. Many times, heirs are in need of cash, so these deals can be done quickly since the heir wants their money right away.
It is a fortunate matter for you that you are involved with a person who is cash strapped. The heirs see the probate property as a means of paying off debts and death taxes that is locked away from their reach. Did you realize that death taxes can be substantial; as much as 55% of the estate value? Estates that were not set up properly to avoid such a huge tax slap have heirs scrambling at the homeowner's death. Heirs have a vested interested in handling things very quickly.
Did I mention these taxes have to be paid in an extremely short period of time after someone dies or penalties start to pile up? So, if 55% tax looked daunting wait until those penalties and interest start mounting up. By comparison, this method of is far easier as you are dealing with motivated sellers in nearly all cases. They are willing to listen to any reasonable offer especially if you have the ability to settle very quickly and get them their cash.
As you can see, while the two methods seem quite the same on first look, they differ greatly due to the time and energy and investor must devote to acquiring the property. Foreclosure property will require you to do some hand holding and a whole lot of relationship building with a person who is about to lose their home. Probate property will require you to sort out ready and willing heirs from those who are not ready to sell just yet; that is a whole lot easier for a new or seasoned investor.
Whether you are a new or a seasoned real estate investor, you owe it to yourself to take a look at the best probate realestate investing course for your money. You can have the system up and running for less than the cost of two pizzas and in less than one day. The very best news for you is that this probate realestate investing system requires zero travel to learn it!
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