Investing in probate real estate involves the purchase of succession properties. Succession is the process used to inventory and distribute the assets owned by someone who has passed away. Depending on the complexity of the estate, the succession process can last between six months and three years. During this time, the estate is responsible for maintaining the property and paying mortgage, utility, and insurance payments.

Investing in probate real estate provides an opportunity for real estate managers to sell real estate. This is particularly beneficial for servicers who are struggling to pay mortgage payments or maintain property in succession.

The first step in investing in probate real estate requires a visit to the local courthouse where probate matters are handled. When an estate is placed in succession, it becomes a matter of public domain. Most of the information about the estate can be found in the decedent’s last will and testament. Generally, the will designates the executor of the estate and describes how the decedent wants his personal belongings and financial assets to be distributed.

If the decedent dies without executing a will (intestate), the probate records will indicate who has been assigned to administer the estate. Generally, this is a direct relative lineage. However, if the deceased has no living relatives or no one accepts the position of probate administrator, the probate court assigns a stranger to administer the estate.

Once the Trustee’s contact information is found, the next step requires a search of the deed records to locate the real estate that is in the name of the deceased. Deed records record ownership and transactions of the land. When a property is transferred or sold, a new deed is registered. Deed records reveal whether the property has a mortgage. If so, the estate is required to maintain payments for the duration of probate.

If the property has a second mortgage, the heirs will likely need to sell the property to pay off any outstanding balances. The estate manager is authorized to make decisions regarding the sale. However, if there are multiple heirs, they must all agree to sell the real estate in possession of an estate. In some cases, the estate may require the probate judge’s permission to sell real estate.

When compiling a list of potential estate succession agreements, investors should contact the property’s executor. This can be done by phone, mail, or in person. When communicating with the property manager, it is imperative that investors are respectful and offer their sincerest condolences.

Most probate administrators and beneficiaries are unaware that they can liquidate real estate during the probate process. Offering to purchase your property could solve your financial problems and provide investors with instant equity on their investment. Real estate can often be purchased well below market value when the heirs need immediate cash.

Investing in probate real estate requires no special training. However, probate property investors must possess strong communication and negotiation skills, along with a sense of compassion.

Investing in probate real estate offers multiple opportunities for profitable business. While it requires a bit of detective work and negotiation with distressed and grieving heirs, when properly executed real estate succession agreements provide a win-win situation for all parties involved.