Real Estate Investment in Probates

Hi Folks,
   Hope your week is going well. Although it is my favorite time of year, when cool weather should be here, it certainly does not feel like it yet!

   The broad umbrella of Real Estate Investing could be carved into many, many different niches, and one of those that you might find interesting and rewarding is what is referred to as "Probate Real Estate Investing".

   What is "Probate"? Probate is the legal process used to distribute estate assets of a person who has died, as per the Stockmarketsreview.com website, in an article written by Simon Volkov, a California real estate investor who specializes in helping individuals with probate real estate investing.

   This specific investment strategy involves buying real estate held in probate, and as Volkov writes, "In the best cases, probate takes about six months to settle", with the possibility of "complex issues or family disputes surround the estate", which can drag on for years. How can Probate Real Estate Investing (REI) help? It can help the heirs liquidate Real Estate before the probate settles.

   The question is; "Why would heirs need to liquidate real estate holdings"? There could be many reasons, as Volkov says, and adds that one of the most common reason is that "the estate has insufficient funds to maintain the property." For example, the estate is responsible for making payments for property related expenses, i.e. Mortgage Payments, to avoid foreclosure. In addition, these expenses include homeowner’s insurance, property taxes, utilities and possibly even homeowner’s association dues. Out-of-town heirs need to maintain the property, but cannot from long distance, so often the estate will hire outside help, such as landscaping and pool maintenance).

   Real Estate Investors - Perk up your ears....

   As Volkov writes; "The majority of heirs do not know they can sell real estate holdings during the probate process." However, as he adds, "Some states require court confirmation prior to selling probate property." (and reminds us that "experts recommend working with an attorney when buying or selling real estate suspended in probate"). Probate real estate investing is a special niche not many investors know about, writes Volkov. Untapped market?

   What do you need to begin? Know your market, know the judicial process, and head to the local courthouse, as Volkov suggests, to see where probate cases are handled, since probated estates are public records and can be viewed by anyone. He suggests checking the info in the decedent’s last will and testament (Volkov says that this will include contact info for the estate administrator, along with the "decedent’s wishes for distribution of assets and personal belongings."

   The will also contains property info, and he suggests a search of the deed records, in which you can check the chain of ownership, and if there is currently a mortgage on the property (If so, the estate may need to sell the property quickly, says Volkov). Initial contact will be made with the estate administrator. This can be done by phone, mail or in-person, and Volkov reminds us that you must be respectful and offer condolences.

   Footnotes on Probate REI:
   * The estate administrator is authorized to make decisions on behalf of the estate.
   * If multiple heirs are entitled to the property they must all agree before the sale.
   * Delays can occur if court confirmation is required.

   Overall, some fantastic info from Mr. Volkov. This is something that is not heavily capitalized on currently by Real Estate Investors, so if you give it a try, please give us some feedback.

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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #Probate #RealEstateInvesting #estate #heir #foreclosure #REI #will #testament #deed #mortgagenote

UPDATED: Private Money...Any Available For Real Estate Deals?

Hi Folks,


   Happy Mid-Week to everyone, and welcome back.

   When we posted on the topic, "Best Markets For Commercial Real Estate Investing", we had a few requests to cover the topic of "Private Money", so as per your request, that is our topic for today!

   We spoke with 3 respected figures in the field to gauge their feeling on the topic. All 3 of them seem to agree that there is private money out there that is available for Real Estate deals, and we present their viewpoints below.

   Alfred Miller, President, Private Lending Solutions, LLC, states that, "Capital isn't scarce; vision is. There is tons of money available for real estate deals.", but says that he wants his, "money invested in solid deals (diamond in the rough)!" and the deals can be either residential or commercial.

   Vernon Martin, a commercial appraiser with American Property Research, who specializes in serving private lenders (96% of his work is for private lenders), says that, "There's no shortage of money waiting to be lent, but there also seems to be a shortage of credit-worthy deals.", which is similar to what Miller has said. "Most loan applications to private lenders are for refinancing deals which are already over leveraged, so there is no way the borrower can pay off existing debt at a safe loan-to-value ratio", says Martin.

   Martin also says that private lenders are, "very interested in financing REO purchases by new investors.", and provides an example, where last week, he worked "on a $35 million construction loan that is being purchased for only $5.2 million. The private lender feels safe in lending $2.8 million. The difference is that loans can be underwritten at today's market values without any disappointment to the borrowers.". Martin points out that some private lenders are looking overseas for deals in potentially "stronger markets" (i.e., "Canada, Australia, Fiji, Barbados, South Africa, Mexico, Costa Rica and Jamaica.")

   Dennis P. Fassett, a Real Estate Investor who interacts with many sources of private money, says that, "there's quite a bit of private money out there. But it's gotten more difficult to get to, despite what the late night gurus want people to believe.", which he attributes to, "the stock market crash and Bernie Madoff scandal". The impact of the crash and the scandal had a few ripple effect impacts on private lending, Fassett says, such as, "with people out of the market, there is a lot more money on the sidelines looking for a reasonable rate of return", and "the Bernie Madoff scandal has made a lot of people quite wary of where they invest their money.",and says that, it's ironic that the scandal has also helped make local real estate investing more attractive, because the investor can go drive by the asset that they either lent against or have an equity piece of."

   Fassett provides a hint into the mentality of the private investors. He finds that, "the private investors that I deal with are looking for a track record for one and a sense of stability by me as well. I'm fortunate that I have couple of dozen deals and now own or control 54 rental units in nice areas that are all doing well. I had one investor tell me that one of the reasons that he invests with me is because I have a whole lot to lose if I screw up in terms of reputation in the community.", and he continues to say that he's also finding that, "the direct approach to getting private money doesn't work anymore, as people are getting pitched to death about everything under the sun, so I have switched to an oblique approach that focuses on drawing people into being interested in my business to the point where they ask questions and close themselves."

   As the recession lingers on, Michael Stark, a licensed real estate broker in California, is clear about the future. "The greatest transfer of wealth since the Depression is underway.". Where this will ultimately channel the private funds is yet to be seen, however, we all hope and pray that it stokes our housing market and the economy. Comments are welcomed !

Have a Great Day, and Happy Rent-to-Owning !
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com





UPDATED: Top 5 Blog post for 2010 (For more information, CLICK HERE)

Best Markets For Commercial Real Estate Investing

Commercial Real Estate Investing

Hi Folks,

   Hope everyone made it through this week a few steps ahead of where you were on Monday.

   Since we always look at Real Estate and Rent to Own from the Residential angle, today we're going to take a look at Commercial Real Estate Investing, along with some information and some forecasts that could prove quite valuable for you.

   We spoke with two individuals that are quite well-versed in the Commercial Real Estate market, and we asked them about which markets are the best right now, and what the outlook is going forward.

   Our first comments come from Shari Olefson, a Real Estate Lawyer, Author, and an expert panelist who frequently appears on CNBC, MSNBC, FOX, CNN, and CSPAN. Olefson says that the best Commercial Real Estate (CRE) markets, "mirror the best - or least worst - residential markets.", and that, "Folks perceive home wealth gains or losses as more permanent than stock markets gains or losses". Olefson says that home equity gains/losses are spread across all socio-economic groups, while only the top 1/3 of Americans hold most of the stock. "Why does this matter?"; Olefson said that, "since CRE values (occupancy and rates) depends on tenants or occupants generating income which oftentimes comes (from)  folks in or near that geographic location.", and that, "When those folks feel poor they don't spend"

   Olefson offers some tips for Investors with strong staying power, in that, "they may find the best deal in longer terms non cashing flowing asset purchases from lenders. For example defunct residential projects in Florida. And particularly where FDIC loss share agreements are involved.". She also says that, "For now acquiring banks are not selling notes on these deals as the guidelines for pricing notes from the FDIC are not clear.", and , "As a result these assets are having to go thru the entire foreclosure process. But once this kink is resolved those CRE note purchases may be good values. Knowing the terms of a banks loss share agreement is helpful as during the time immediately before those expire banks will be especially eager to try to deal."

   We also spoke with Denise Beeson, a Commercial loan officer with Bay Sierra Financial, Inc., who states that, "If you are a professional i.e. MD, dentist, podiatrist, or small business owner, etc. this is the ideal time to buy your building under the SBA 504 program (10%) down, or through a commercial loan (25-35% ) down with interest rates this low.". The reason, she says, is that, "Owner occupied buildings are very appealing to the professional or business owners who have paid rent/leased and the building owners are interested in selling."

   Beeson believes that the market will continue to be, "rather 'soft' in the next 2-3 years as buyers recoup from financial problems i.e. stock market decreases, vacancies, depressed real estate prices.", and that the economy has to stabilize before you will see any active purchasing.". Beeson does go on to say that, "the private money market is prospering since commercial investors always need money to buy or refi outside of the traditional banking avenues."

   Overall, it does truly seem a mirror image of the Residential situation, but usually lags behind the events in the Residential spectrum. If you have anything to add to this, such as promising CRE markets, or anything additional, please comment below.

Have a Great Weekend, and Happy Rent-to-Owning !
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com