Probate Real Estate Investing is a Huge Opportunity

In many aspects, probate real estate investing is a hidden opportunity that most people have not realized yet. Recently with the upsurge of foreclosures, the foreclosure properties have been receiving all of the media's attention. Why is probate real estate investing such an opportunity?

Take a look at these numbers and let's see how probate properties compare to the number of foreclosures:

In 2008, it was reported that 2,330,483 properties in the United States went into foreclosure. This represented an 81% increase over 2007. So, even though it was a record year for foreclosures, there were 2.3 million foreclosures.

According to US census records, there have been a consistent amount of deaths for the last 10 years. In 2005, there were 2,448,000 deaths in the United States. Census records for 2007 also show that roughly 66% of people own a home. So, if you take 66% of the 2,448,000 deaths, that means that there were roughly 1,615,680 probate properties in just 2005. This figure will likely increase as the baby boomers increase in age.

When you consider that everyone hears about foreclosure investing, but few people pursue probate real estate investing, there is a huge opportunity. Usually when a home goes into the probate process, there are much fewer investors going after those. It is almost like a hidden opportunity if you are willing to put in the time and research.

Researching Probate Cases

Doing the research is the hardest part of the process. You want to look in your local newspaper in the legal notices or your local legal publication. You are looking for a "Notice to Creditors" listing. This is a notification to the public that someone has passed away and that the creditors have a period of time to file that they are still owed money by the decedent. It will look like this:

The important part of this notice is that it will give you the case number so that you can look it up on your county records.

When you are doing the research for probate real estate investing, you want to pull the file for the case and familiarize yourself with the contents so that you know what to look for. A typical probate file would contain the following documents:

• Application to Probate Will
• Application to Administer Estate
• Letters of Authority
• Last Will and Testament
• Appraiser Assignment
• Waiver of Notice to Heirs
• Fiduciary Acceptance Letter

In your county, the forms may be called something different and not every file will contain each of these documents. The key pieces of information you want to identify are the following:

1. Is there a surviving spouse? If there is a surviving spouse, the property will likely not go through the probate process and you would be wasting your time. 
2. Is there real property involved? If there isn't any real property, there will not be a house for you to purchase. Again, you would be wasting your time. Move on to the next case if there isn't any real property. 
3. Who is the personal representative that has been assigned to settle the estate? This is the person that you will want to contact if there is not a surviving spouse and if there is real property. This will be the target of your marketing efforts. 

Sometimes, there are so many files that you are researching that it is difficult to keep track of them all. If you want a tool to help you track them, use this Probate Case Worksheet to help you stay organized.

Once you have the information for the personal representative, that is who you want to contact about purchasing the home. Keep in mind that they have suffered a loss and that you need to be sensitive to that. Be a solution provider as opposed to the greedy investor looking to make a deal.

If you can be empathetic to their needs, you will be much more successful with probate real estate investing.