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Family Feud with an Auction Deadline - Adventures in Probate/ Estate Purchases
One of our investor students told us of an interesting probate deal or "adventure" they're working on now and while it's a good story, it also illustrates lots of the ins and out of probate or estate issues and purchases. The Seller (we'll call him Scott) co-owned this house with his mom, and he co-signed on the loan with mom. Mom has been deceased for 3 years now. Scott says his sister lives there and is not making the payments, so the mortgage is behind 6 months in payments, and he's ready to sell the house. He said Mom left no will for her estate, but there are 6 other siblings. If that's not enough of an investing adventure for you yet-Scott then tells us that the bank is threatening foreclosure. They're not just threatening?.we discover that the house is scheduled to go to the courthouse steps in 3 weeks. Why would anyone even try to purchase a mess like this with a short timeframe? Well, Scott owes $33,000 + $5000 in back payments on a cosmetic, light fix-up $10k rehab house that's worth about $140,000 when it's all fixed up. So let's do a little math to see if there's just a wee bit of profit in it. ARV $140k minus Rehab $10k minus BuySellHold $21k minus Profit $25k equals MAO $84k So the max we could afford to offer on this house is $84k, and he has to have $38k to cover the mortgage and the back payments, say another $35k so that each Scott and every other sibling/heir gets $5k profit too. That's a total of $73k, still leaving $11k EXTRA profit for the investor!! There IS big money to be made if you understand issues like these! Now, how do we work through the estate stuff. Well first we (or Scott) would have to negotiate this price with all the siblings to reach agreement on their share. Next they'd all have to verify that "mom didn't leave a will". If so, Scott could petition the probate court to appoint him as Administrator of the estate and he'd have to run a notification of the estate ad, and get all the siblings to sign document agreeing to his being made Administrator. Now Scott could sign the Purchase Contract as "Scott, Administrator of the Estate of Momma". If the siblings said "no, Mom DID have a will"?.then we'd spank Scott for fibbing, and see who was appointed as Executor of the estate in her will. That person would then have the court probate the will, and run an ad. Then the Executor would have to sign the Purchase contract as "[Name], Executor of the Estate of Momma", and sell the house and distribute the profit to the sibling/heirs as described in mom's will. In the meantime, don't forget the upcoming foreclosure auction either. It's a race between the probating and the foreclosure to see who will hit the 'finish line' first. So the investor (she can say she's a friend of Scott, just helping out) will need to talk to the lender or their foreclosing attorney, in order to stall the auction. She'll need to get a 'statement of account' to find out what the loan balance is, and also what the back payments, penalties and attorney fees add up to. These additional fees could be paid by the investor as preparation for a subject-to purchase. The risk is that if there is no will AND the sibling/heirs couldn't reach a quick agreement on price, she'd have to keep making monthly payments to the lender to prevent foreclosure but she wouldn't yet own it until (hopefully) the siblings reach agreement and appoint Scott as Administrator. I can hear you saying "but the investor could try for a short sale purchase direct from the lender, and not worry about all these siblings and probate issues"?.problem is she can't get all the borrowers (momma's deceased) to sign all the short sale paperwork, and she doesn't yet have the property successfully probated to have a new legal Adminstrator/Executor that could sign either. So no one can yet legally sell, nor sign short sale paperwork until either estate is probated or the lender forecloses and takes back ownership of the property?.the clock is ticking?we shall see. Best of success & abundance, Lou Castillo FREE! Real Estate Investing Secrets To Earning $100,000 Your 1st Year! -- 11 Overlooked Real Estate Statregies That Will Turn Your Investing Business upside Down And On The Fast Track TO Success...Guranteed! Plus A Bonus Track With A Secret So Successful It Can Double Your Investing Income Overnight! http://www.InvestorSuccessTactics.com
MORE RESOURCES: L.A.’s Real Estate Upfronts Reveal Penthouse A at Rosewood Residences Beverly Hills Hollywood Reporter Erie County real estate transactions Buffalo News Real estate mogul cautions about avoidable mistake when buying a home, explains how to avoid 'drowning' Fox Business Coloradans negotiating lower fees for real estate agents with new law on horizon Colorado Public Radio Massachusetts real estate transactions for Hampden, Hampshire and Franklin counties May 19, 2024 edition MassLive.com Portside Real Estate acquires Belgrade Lakes brokerage Kennebec Journal and Morning Sentinel Illinois real estate: Home sales in Peoria, Tazewell, Woodford counties Peoria Journal Star Worcester County real estate transfers, Sunday, May 19 Worcester Telegram Top 10 Brooklyn Listings: A Flatlands Standalone Brownstoner Berks County real estate transactions for May 19 Reading Eagle REAL ESTATE | Check out Braund's Flooring & Remodeling LLC in West Bend, WI washingtoncountyinsider.com Wellesley resident Peter Covo joins Conn Kavanaugh as partner in firm’s real estate practice The Swellesley Report Private Advisor Group LLC Purchases 1425 Shares of Doubleline Commercial Real Estate ETF (NYSEARCA:DCMB) Defense World Increases in interest rates stress commercial real estate Richmond Times-Dispatch Amalgamated Bank Trims Stock Position in Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) Defense World Egypt boasts real estate portfolio valued at $200bn, ready for international export - Dailynewsegypt Daily News Egypt STAR resource center Department of Taxation and Finance Kenosha CubeSmart storage facility sold to new owner Kenosha News The Properties High Interest Rates Can't Touch The Wall Street Journal Connecticut real estate law changed after MV Realty investigation Eyewitness News 3 Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) Stock Position Reduced by Victory Capital Management Inc. Defense World China's real estate market sees surge in weekend consultations and trading, boosted by accommodative policy Global Times Real estate transfers: May 17, 2024 RiverheadLOCAL 10 most expensive homes sold in Cuyahoga Falls, May 6-12 cleveland.com News anchor sells luxury Scottsdale home he built for $6M The Business Journals Real Estate Newsletter Articles this Week: Housing Starts Increased to 1.360 million Annual Rate in April Calculated Risk China Says It Will Start Buying Apartments as Housing Slump Worsens The New York Times See all homes sold in Avon Lake, May 6 to May 12 cleveland.com Real Estate Mogul Grant Cardone Closes Largest All-Cash Multifamily Deal In South Florida This Year Yahoo Finance 10 most expensive homes sold in Portage County, May 6-12 cleveland.com Should I Buy a House Now or Wait Until 2025: Expert Forecast Norada Real Estate Investments Robert Willett may be targeting female Realtors in Northeast Ohio Akron Beacon Journal Mid-May Greenwich Real Estate Market Report Greenwich Sentinel Refined Real Estate: Unique Leschi home with lake views lists for $1,395,000 seattlerefined.com Why Renting Still Makes More Sense Than Buying in Major US Cities Business Insider London Real Estate Is About to Get the ‘Selling Sunset’ Treatment Hollywood Reporter What's real estate wellness? Fortune Billionaire Frank McCourt raises his hand to buy TikTok Business Insider The Michael Houck Real Estate Guide for May 19 Oil City News Dodge County Real Estate Transfers Fremont Tribune Naples, Florida number of homes for sale among highest in US Naples Daily News Ellison sues real estate broker Chad Banken over alleged schemes involving contracts for deed Star Tribune Busch relative settles squabble with Clayton investors over real estate trust St. Louis Post-Dispatch Home listings are on the rise in southern Colorado, while other indicators show a slowing real estate market Colorado Public Radio Southern fast-food chain Cook Out buys Tampa real estate The Business Journals Real Estate's Got Talent – Commercial Observer Commercial Observer MCB Real Estate Revives Long-Awaited Viva White Oak Mixed-Use Project Source of the Spring New Rules for North Texas Real Estate Agents Creates Uncertainty Dallas Observer Did Fort Worth’s real estate market really ‘bottom out’? | Fort Fort Worth Star-Telegram This Florida 'Skinny House' is only 10 feet wide. But it's selling for $619,000 WKMG News 6 & ClickOrlando |
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