My First Deal Might Be a Probate

[Jason Pachomski]

Hey everyone,

So I've been mailing letters to probates in my area (both to the petitioner and the attorney) and I finally got a lead. Got a call from the son of the deceased who is the administrator to the estate.

Wondering if anyone is willing to comment on what their exit strategy would be, given this info:

ARV: 325K

Owe: 200K

Payment: 1200

1 month in arrears

est repairs: $15K

The son seems very motivated to unload the house.

My initial reaction (being that I don't really have any of my own capital to work with) would be to wholesale it. I would offer him $205K cash for it. (ARV x 70% less repairs and $7k fee for me). Doing this would allow him to pay off what is owed and still walk away with 5 grand.

Is this the best exit on this kind of deal though? Being that I'm new, obviously wholesaling is the easiest exit strategy to wrap my brain around, but I'm not opposed to get funding (private and/or hard money) to do the fix and flip myself instead of wholesaling it to another investor. Just wanted to see what any of you thought about the deal in general and how you'd work it.

Thanks in advance!

Jason

[Rick H.]

Originally posted by @Debra Leeson:

Rick Harmon, you may enjoy quipping out criticisms, buy you lack of helpful information shouts loudly. sell your stuff some other place.  That's two cent.

You may be right!  Who am I to argue what your opinion is worth?

I guess I fail to see why you believe that I'm pitching something. People who have been to my site know I really have nothing to sell (but good will). 

And, perhaps my straightforward suggestions do not resonate well with you, especially if you are new to real estate and have yet to do many deals (perhaps even your first investment).  That's perfectly understandable. 

As for the ability to convince a SoCal PR to sell at a substantial discount, I suggest that one had better have an arsenal of skills and a good understanding of real estate. 

A property with a reverse mortgage CAN be sold subject-2 the loan. Of course, even if the lender has not recorded an NOD, the balloon feature of the loan has been triggered by the death of the last borrower, called a "maturity event" in the servicing industry.

So, buying a property with a looming balloon payment offers fewer choices to monetize since someone will need to pony up a couple hundred grand in order to keep this property  or write a big check from a new loan upon acquisition.