Buying probate properties to resell them at a higher price is a great way to make a lot of money if you do it right. You can make a lot of cash and have a very effective investing process if you learn the ins and outs to the probate real estate market, and you have the cash to get started. Here are the 5 things you need to do to make sure that your probate real estate flipping plans make bank.
1. Getting in Touch with Probate Real Estate Agents
The first thing that you should do is get into contact with probate real estate agents. The probate process can be complicated; you’ll need Santa Clara county estate planning attorneys on your side as well as a probate real estate agent. While probate properties must be publically listed for sale you’re going to get hotter leads if you let a probate real estate broker know that you’re looking to make a purchase. Show that you’re serious and you could be updated whenever a property in your price range hits the market. This puts you in a great position to snap something up before others get interested.
2. Viewing Probate Properties
You should view every probate property that you go to with a critical eye. These properties are not going to be repaired in any way when you purchase them; they’re not even going to have termites removed if some are present. This is good for you in the long run; often these houses sell for below the average market rate because they haven’t been prepped for sale. If you invest the money to clean them up yourself you can put them back on the market for a higher price than you paid. Small or easily fixed problems in a probate house don’t matter if you don’t mind footing the bill, but you should be wary of major renovations; you don’t want to sink too much money into a property you’re just going to flip.
3. Negotiate Hard
You’ve got a huge advantage when you’re negotiating with someone in the probate process. You know that they’re eager to sell. Whether they need the money from the sale to cover funeral expenses, estate taxes, or just so that they can let this whole process end, you know that they want to make the sale. Cut the price down as low as possible; if you can, find out what the property was appraised for. They can’t legally accept a price lower than 90% of the appraised value, but arguing them down from 94% to a flat 90% can save you a lot of money.
4. Prepare for the Overbid Process
Overbidding is where you have to wage war for the property you want. If an heir isn’t satisfied with the amount that you offered they can put the property up for auction. You can go in and bid for your property, but it’s going to cost you. You should prepare for the overbid process by bringing your cashier’s check for 10% of the minimum overbid amount, as well as a clear idea of when you’re going to walk away from the property. Don’t let a bidding war drive you to pay more than you told your probate real estate agent was your hard limit.
5. There’s Always More Probate Homes Out There
One thing to remember is there are always more probate homes out there. If one requires too much work, or the overbidding process goes too high, or it becomes less desirable: move on.