You can make a lot of money in real estate investing when you’re dealing with probate properties in 2018 and beyond. This statement is important to recognize because over the next ten years a lot of properties are going to come available. For example, baby boomers were born between 1946 and 1964 which means a big part of the population is entering their 70s. Furthermore, the baby boomer generation had money to spend and most likely invested in nice properties. Many people will tell you the margins are too thin with probate properties because of the delays. The statistics are pointing to different results. The math says a lot of homes need to change hands over the next ten years. We’re going to cover how positioning yourself in front of this trend Is not only a good idea, but it’s also a big necessity within the industry.
Probate is the process used by the courts to handle the transfer of assets of the person who had just passed away. The courts hold the assets of the deceased while they appoint an administrator or executor to settle and disperse the estate. The executor or administrator in most cases is usually a court-appointed attorney. In some instances, a family member can take the position also. The most noticeable challenge people face with this entire process is the length and duration it commonly takes to execute. Assets and even bank accounts can get tied up in the process for many months until it’s settled. Some people compare the wait time to loan modifications and even short sales. In some situations, It seems like it takes forever to get through, but it’s often worth it in the end.
There are generally four parties involved in the probate process. The first is unmistakably the deceased. They sometimes have a legal will written detailing their wishes on how their assets should be divided. The second party is the courts. Everything will ultimately be settled through the courts because you’re dealing with the transference of the property. The third party involved is the administrator or executor. They will be the person to handle the details of the property while it goes to the transition phase. The fourth party is the beneficiary of what’s outlined in the wishes of the legal will. If the deceased does not have a will, this process can even take longer.
The legal process can be lengthy when there are so many people involved and might even take longer than banks involved in foreclosure auctions. For example, the courts and the administrator will need to notify creditors if there’s still money owed on the property. It’s essential the courts settle anything due to creditors first. Beneficiaries sometimes disagree with the settlements and file lawsuits. The additional litigation can drag out the process even longer. Emotions can run high, and it can be quite tricky at times. Many investors offer to step in and purchase the property at a deep discount because often the beneficiaries receive very little in the end. Many people recognize the potential issues and are too busy to deal with all the legalities. Stepping in and offering your services is often welcomed because the Heirs want to move on with their lives.
Real Estate Investors are using a strategy to make money on probate Properties by helping to educate family members of existing baby boomers. Investors are focusing on adding these people to a Client List helping to educate them on the probate process. In addition, the list of names investors collect is an asset to their business because they are building trust while they are educating people. During this process, potential heirs are considering their options, and come to know, like and trust the investor helping them. The future beneficiaries understand it’s just a matter of time and would preferably work with someone they know through the process.
This strategy is considered a long-term play, but if used correctly, it can be very profitable and helpful for everybody.
In conclusion, the probate process can take a fair bit of time and is worth enduring if done properly. The beneficiaries understand they’re the last to receive the remaining value after the probate process is complete. Most heirs are very eager to finalize the process and move on with our lives. Building a Client List ahead of time with intentions to educate families can go a long way and be very profitable at the same time.