Probate is an often-misunderstood term. A probate home is one where the owner is deceased, and the home (and any other real estate) is part of an inheritance. We often hear references to being “tied up in probate.”
References to probate can put an investor off. But the truth is that when it comes to probate homes, the word probate can mean easier profits for a real estate investor than you may think. Here’s why:
First is the very fact that many investors tend to avoid probate properties because of the idea that they’re “tied up” and will be a problem to try to deal with. This just means more opportunity for you. Investing in a probate property requires knowing the same information about the property as for other types of real estate investing: What’s the value of the probate property? Are there any title issues to resolve? Will it require extensive repairs? Are your financial and legal interests protected?
Second, probate properties are often in the hands of very motivated sellers. This is true for a variety of reasons. The probate property may have been left to several heirs, who would rather sell the home and divide the cash than decide who gets to live in the house. The property may require extensive repairs that the heirs don’t want to bother with, or can’t afford. The heirs may be involved in jobs and lives that are far away from the location of the probate home, and may not want to move in order to live in the house. The house may be approaching foreclosure, and capital may not be available to “rescue” the house and catch up the payments.
What could be richer with easy investing potential than a market that most people mistakenly avoid because they don’t understand it, and where the sellers are often very eager to give you a deal? Investing in probate property can be your ticket to big real estate profits.