Growing your portfolio of properties is one of the best ways to become successful in the real estate business. Real estate investors can often maximize their buying opportunities by finding properties that need some cosmetic improvements. Such homes might be available at low prices, then might sell for much more once you’ve invested in some repairs and upgrades. Estate sales often offer terrific opportunities to find fix-and-flip properties.
Pros and Cons of Buying an Estate Sale House
You might be able to find an estate sale house that’s for sale below market value. The beneficiaries of the estate are responsible for paying expenses like taxes, utilities, and insurance on the property until they can sell it. As a result, they’re often motivated to sell the property quickly. This reality often leads to great deals for real estate investors.
Unfortunately, buying property from an estate sale can also carry some degree of risk. If there are multiple beneficiaries of the estate, they might all have to agree on the sale price before the deal can proceed. As a result, it can take a long time to get through the process and reach the closing date.
There is also some financial risk. A probate sale requires a 10% deposit, which is not refundable in many cases. The purchase is not contingent on an inspection, which is why there are fewer ways out of the deal and an increased risk of losing the deposit. Following best practices for estate sale real estate investing can help you minimize your risks and maximize your profits.
Tips for Estate Sale Real Estate Buying
Buying an estate sale house is one way to get a more attractive deal than you could find through traditional real estate listings. The risk and reward are both higher, but these three tips will give you a competitive advantage. This is how you can increase your chance of making a successful investment.
1 – Find the Right Properties
Depending on how you normally find listings, it can be hard to distinguish probate listings from other listings. There are a couple of ways to identify probate listings with relative ease. One is to connect with local real estate agents who specialize in probate listings. Another is to contact the local probate court and ask about their recent cases and see if the estates include property.
However you find the properties, it’s helpful to inspect them before you make an offer. Sometimes the price is low because it’s a terrific deal. Other times, the price is low because there are serious issues that might not be obvious. The estate beneficiaries might not know about all of the issues, so they can’t disclose them. A thorough inspection from an experienced contractor can give you an idea of what you’re getting into.
2 – Learn How to Navigate the Process
When making an offer on a property through probate court, you have to make a 10% deposit. This can limit the number of offers you’re willing to make at one time, which might change how you prioritize your next move. You can also expect to attend a hearing in which the court hosts an auction to attract other bids. This can make the process of securing financing and completing a transaction more complicated.
3 – Secure Your Financing
Estate sale real estate investing gets a lot easier when you work with an experienced money lender. When you have you have access to fast funding, you can proceed through the estate sale house-buying process with confidence. Putting down a deposit and getting through a potential auction is much easier when you have reliable financing. This provides a significant advantage and improves your chance of experiencing a positive outcome.
Estate Sale Real Estate Financing
As Southwest’s premier private money lender, Capital Fund I has the experience to help you make the most of your estate stale real estate investing opportunities. You can apply for financing today to start the process. This ensures access to funds when you need them. If you have any questions about how to buy estate sale property, please don’t hesitate to contact us.
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