Probate Sale. Probate sale is one that involves a deceased Seller(s) and the property is being sold either traditionally and or coupled as a short sale. Many of these properties are without any type of mortgage and can be purchased right especially if the Seller's heirs are out of state and the property needs cleaned out or requires lots of repairs.

Most Sellers are anxious just to get the sale over with because of the ongoing monthly expenses that many are paying from their own personal accounts. Some properties may have foreclosure issues and most all have estate attorneys that have already cleared the way for the sale. Many of these properties are great deals and some may offer Seller financing.

Probate can be completed with or without an attorney. Best to do with an attorney if you do not know what you are doing and also have confidence that the attorney will also work with you.

Most sellers are tired of it by the time that the investor is involved. Many have paid for a funeral with money they did not have. A retainer to the attorney and continuing monthly bills for a mortgage, taxes, insurance and utilities that is quickly draining them. Usually the property has a large accumulation of personal items and lots of unwanted debris that needs disposed of.

Most properties need lots of work and not presentable to a retail buyer. The heirs just want to sell it and be done with it all.

To learn more about the amazing profits of probate, please visit our website or contact us for more in depth information. Have questions...please contact us.

When you plan to invest on property, you have to make sure what you are investing on is worthwhile. Don't just invest because it's a tax delinquent property and it's cheap. Know if you are really maximizing your potential to make money in tax delinquent investing by scoping the market and getting all the location details of the properties that could be up for auction. After getting the addresses of the properties, which you already categorized, scrutinized and decided upon in a certain county. The next thing that you should do is do a tour plan on the county.

You will need a map, which you can buy in a grocery store, a pen, a notepad, a good camera and a car of course to make it fast paced. Having pinpointed the properties that you are interested in by knowing all their addresses mark each property on one map. When you are finished marking, you can take one look at it and it will be clear which route you need to drive so that you will not be going on around the areas twice. Wasting time is always a bad habit.

When driving through the properties make sure that you jot down the exact geographical location and special notes you remember from each property. This will help you in the marketing of the property later on. With your camera on hand take a digital picture of what you had just written in the notepad (which is the house number), because this will help you not to get confused over things. Come to think of it, you will be looking at 15 to 20 lots; you cannot just trust your memory to remember all the details. From experience, even when I have a picture of a property at hand, without my notes visible in the photo, I could not remember that one special detail I saw when I was right in front of it. I've forgotten some details, even if it was only hours ago that I saw the land in the photo. Now, I have a bunch of photos of properties I found interesting but could not tell you what I found interesting about them by just looking at the photo.

What I now do is I take a notepad and I label each property by numbers, like "Property 1". Then I go on to take a picture of property one. I take pictures of everything I want to take a picture of in that area and then I sit down and take notes. On the notes I make sure that the number 1 is apparent. I make a note that this property is flat, street like this, road access, it has a nice mobile home on it, or a nice house, the house has green roof, etcetera. Then when I download my digital pictures I know that all the pictures behind the number one that I took a picture of belong to the sheet where I put the number one in. Now I can match them up and get a good reminder when I need to make my final decision on which properties I want to buy.

Lease Option Investing

Exactly what is lease option real estate investing? A lease option is basically a rent-to-own contract for a piece of real estate. The buyer signs an exclusive contract to have buying rights to a property after a given amount of time. When the allotted time expires, the buyer can do one of two things: buy at the price agreed on when the contract was signed, or don't buy the property and forfeit down payment.

To make this easier, let's take a look at this from a buyer's eyes.

Buyer

Why would anyone use a lease option for real estate investing? Try risk management. If you were shopping for a home a few years ago (before the market went bad) but were unclear if the area would be hit by recession, you could use a lease option to pay monthly 'rent' and then wait for the contract to expire. The next step would be to get the property appraised. As a buyer, a lease option means you do NOT have to buy the property.

So when you look at the home appraisal after a few years, you compare the current market value to that of the agreed upon purchase price. If the home is worth more than what you agreed, you can purchase and gain instant equity. But, if the property went down in value, then you can leave the deal with no ties and are only lose the down and monthly payments.

How about some real numbers to see how this works? You sign a lease option to buy a home for 100,000 after a 3 year contract. You put 3% down for the contract as you 'good faith', and agree to pay 100$, above current market rents (this excess going toward a future down payment when the real purchase takes place).

When the contract is over you have the home appraised. Luckily the home went up 10% over the last three years! Suddenly you have exclusive rights to buy the home for 10k below the current market value! Since you already put 3% down and can couple that with 100/month (2400) credited for the purchase, you have a total of 5400 (5.4%) toward the real purchase! Now, 10% of 110000 is 11,000 and you now have 5400+10k in equity for a total of 15400 towards buying this property! So, with 3% down and a little thriftiness you have gained a 15.4% down payment!

Yeah, but if the house went down in value? So the appraisal comes in at 90,000. Ordinarily, since the house went down 10k, you would have to shoulder that loss. But since you purchased a lease option, you get to walk away from the property instantly and with no further commitments. However, you do lose the down payment and the extra 100/month. In other words, you lose 5400$. Yes it's a loss. However, if you had bought the home for 100,000, you would be suffering a loss of 10,000 instead of 5400! This is a loss regardless, but you save yourself nearly double the loss by using a lease option.

But how does this benefit the seller?

Seller

During these poor economic times, it's very tough to sell your property since there are many sellers polluting the market and increasing the number of unsold houses. The excessive inventory lowers overall prices. Now, for some reason (personal or financial) you need to sell your property and fast or cover the payments.

Lease options can do both and here is how.

Thanks to the financial education available, many people want to buy a home but do not have the credit or the full down payment needed to buy a home. Seriously, how many people do you personally know that could be identified as one or the other? These people are ready and willing to buy a property but can't get a bank to look in their direction. Hence why a lease option for a low down payment that accepts medium to poor credit has such a strong customer base.

Okay, time for some more real numbers, this time from the seller's perspective. Let's assume you have a home that you paid 200,000 to buy. Then the market plummeted and now your home is worth 190k. You will have a 10,000 loss in combination with realtor fees if you were to sell your house. I doubt this sounds appealing. What about renting it out to cover the payments? Assume local rents for a 3/2 in your area average 1100. This would not cover your approximate $1400 payments. Are you screwed? No.

You jump on craig's list and offer to lease option you home. 'Rent to own this 205k house for as little as 6k down!' Then you detail the extra monthly amount that will go toward the future total down. Notice you asked for MORE than what the property is currently worth. Why? Because those buying the lease option are buying based on an ESTIMATE of what the home will be worth when the contract expires.

Now take a look at the monthly premium. Obviously the regular rents in the area will not cover you payments. So let's break the payments down a bit. Of the $1400, roughly 200 is used to reduce the principle, so you will get it back upon selling. So the1400 is really 1200. That's isn't too far from the1100 regular rent. Since you're doing someone a favor by carrying the contract, asking an extra 100 more should be reasonable. HOWEVER, the buyer will also be paying more to be used as a future down IF they decide to buy. If the buyer does not exercise the option, then you get to keep all the extra money (down and extra monthly payments).

What this means is that your monthly payment would be 1100 plus a 'fee' of 100. In addition, there is the negotiable amount toward the buyer's future down payment. Assume that extra payment is 200/month over the 3 year contract. The buyer could have the mitigated risk purchase of your home IMMEDIATELY for a paltry 6000$ down and modified monthly payments of 1400. Oh, but we aren't finished. That just happens to be the exact same amount you're paying and you have a real bank mortgage!! Hopefully you can see how this could be appealing to potential buyers that are lacking the down payment. And it's all mitigated for risk!

So how does that really benefit you? Well, the buyer agrees to a purchase price that is NOT impacted by the current economic slow down. You adjust the this price as if the property had never lost any value. In other words, you want a 3% annual appreciation on your home so you offer a 1 year purchase price of 200,000+3% or a two year buy price of (200k+3%)+3%. This would be 206k and 212180 respectively.

The 3% is really $6k. But, isn't that the same as the down payment for the option?! So if the buyer does NOT buy the house after 1 year, you STILL get the 3%!! Now, add in the extra monthly 200 and you get another 2400 per year! And if they DO buy the house? You get your 200k+3% anyway! Lease options are a win-win situation.

You get your % regardless of the market value and the buyer gets their purchase mitigated for risk at the same price while getting a potentially substantial gain in equity!