Need help with Probate/ Preforeclosure deal - Posted by Monte

Posted by Rick Harmon (CA) on March 16, 2006 at 10:36:40:

WhyK - Sounds to me like your doing a good job of homework on probate. BY the way, you bought the very last copy of Gayle Ellison’s “Inside a Probate Sale.” No longer available as a separate book.

Has it been helpful? It sounds to me like you’ve really studied it.

Need help with Probate/ Preforeclosure deal - Posted by Monte

Posted by Monte on March 14, 2006 at 15:10:19:

Recently spoke with the owner of a home that is headed to foreclosure. Owner is $4800 in arrears. This is in. probate.

$4800 to bring current
$12000 repairs
$5000 to owner to walk (already agreed on this amount)
$21,800 out of pocket
ARV= $195k based on comps in area from local realtor
$195k
-$21.8k
-$5.8k to realtor
-$10k incidentals
157.4k+ profit

This is a good deal? However, not sure how to deal with probate issue. Also, only have purchase agreement from Office Depot, which is your basic agreement. Is this good enough? Also, not sure how Porbate affects the deal? The property is in Northern California. Thanks in advance for your feedback.

Re: Need help with Probate/ Preforeclosure deal - Posted by whyK-CA

Posted by whyK-CA on March 15, 2006 at 01:06:03:

Monte, I?m bit confused. You said you spoke with ?the owner?, but is he/she really? If this property is still in probate, then he/she is not the owner yet, isn?t he/she? If he/she is really the owner, then it is not in the probate any longer.

You are probably talking to the executor or administrator, not the owner. Do you know how many heirs there are? Do you know if there is a will? If so, have you checked to see who will get the house? Is the probate going under IAEA or going under the old law with confirmation & notice? Has the place appraised by the referee? Is the place already listed?

SIGN THIS DEAL UP NOW!! - Posted by IB (NJ)

Posted by IB (NJ) on March 14, 2006 at 19:03:26:

I don’t like the idea of you hiring a ‘consultant’ like Luke suggests. He could very well steal this very lucrative deal right from under you (yeah you could protect yourself with a contract but who needs the competition coming in and whispering in the seller’s ear that he could have gotten more thus creating seller’s remorse which is always trouble for you the buyer).

Instead SIGN THIS DEAL UP NOW and THEN (after you sign it up as you don’t have time to wait for a lawyer to draft up a contract unless he can get it to you in 2 hours) get a good attorney. Probate is typically easy IF there was a last will and testament designating your seller the Executor of the estate OR all the heirs are on the same page). Pay for the probate yourself so that you maintain CONTROL of the deal.

Come back here for daily advice. But I don’t really like the ‘consultant’ thing. I guess I’m just paranoid like that.

Ib

Re: Need help with Probate/ Preforeclosure deal - Posted by luke hoppel

Posted by luke hoppel on March 14, 2006 at 16:10:14:

Ok, here’s where I am confused: You say the seller is 4800 in arrears which would insinuate the there is a loan accociated with the property. You worked your math like the property was free and clear.
If there is a loan you need to take paying that off into account.
If he/she is in forclosure due to property taxes or something to that effect and the property is owned free and clear then I would hire a lawyer to help you navigate all of this because that is a hell of a deal!!
Good Luck,
Luke

Re: Need help with Probate/ Preforeclosure deal - Posted by Monte

Posted by Monte on March 15, 2006 at 15:33:15:

The Dad died and named the son beneficiary in his will. He is also the executor. There are 3 siblings all in agreement to sell the house. Not sure how the probate works (IAEA or old law). The home is not listed. The Probate attorney seems to think everything will be okay for that price because the home needs repairs and the siblings just want to get rid of it.

Re: Need help with Probate/ Preforeclosure deal - Posted by Monte

Posted by Monte on March 14, 2006 at 16:40:26:

You are totally right! The loan balance is 82.7k. So sorry left out the detail. Makes a huge difference.

Re: Need help with Probate/ Preforeclosure deal - Posted by whyK-CA

Posted by whyK-CA on March 15, 2006 at 16:04:02:

Attorneys like to go with old fashion way with confirmation and overbids. Your best interest is to use IAEA. Does he have the letter of testamentary yet?

Re: Need help with Probate/ Preforeclosure deal - Posted by Luke Hoppel

Posted by Luke Hoppel on March 14, 2006 at 18:38:18:

Ok, well if all the rest of you math is good then that leaves you with 70K which is still a good deal. Here’s what I would do: I would find an experianced no-crap investor in your area that knows a thing or two about probate and pre-forclosure deals. Once I located him/her, I would pay them a consulting fee and don’t expect it to be cheap. I would pay between 50-200 dollars an hour, the better they are, the more you pay. Just remember the number one rule in negotiation: Make them give say the first number.
I would also hire an lawyer to help you out. Don’t be greedy and try to save every cent. Do it right the first time and you save time and prevent unneeded stress.
The last piece of advice is to CHECK REFERENCES when you are hiring the lawyer or the investor. Remember, you are hiring them, make sure they are worth your money.
Good Luck,
Luke