All Forum Posts by: Robert Davidson

Probate can't be closed until all creditors have been paid.  Very often estate assets must be sold to do that.   If the estate is administered under the IAEA (Independent Administration of Estates Act), which the vast majority are, a Personal Representative will be appointed (almost always the person or substitute, the decedent recommended in the will.)  This is very often the main heir.  If the PR is given Full Authority, that person immediately has the authority over the assets including selling the house and other assets before the probate is closed to obtain cash to pay creditors.  The PR can immediately sell when they receive authority.  The heirs want cash.  Also, often the PR does not want the hassle and expense (double mortgage payment, insurance on a vacant house, maintenance, etc.) of caring for a house while the probate continues.  Another reason they sell quickly.  The PR must give an accounting to the court of cash receipts & disbursements to creditors before distribution to the heirs.

There are several bird dog "systems" out there.  One I use is Cameron Dunlap. 

The Realtors' cartel has done a good job of making any appearance of brokering i.e. bring together a buyer and seller, illegal.  I would not call it "information brokering"; rather information research.  You can run a Craigslist ad "seeking someone  to research neighborhood properties, county records, and court records.  Need a car, camera/smartphone.  Pay based on information researched." Pay based on the amount of research you have them do - Level 1, just take pictures and give you the address.  Level 2, add research county Recorder's and Assessor's records.  Level 3, above plus research Superior court records for probate information.  Never use the term "bird dog."  It's a red flag to Realtors who search that term.  When someone responds, state they will drive neighborhoods to identify various types of properties and [possibly do basic research of the county records.  Tell them they will never contact property owners. (It's a true statement but necessary because you will have some real estate agents call to get information to file a complaint that you are using an illegal broker.) 

Another excellent source for details on buying probates is Ron Mead.  His process covers all of the details.

The other way to look at No Money Down deals is to think of it as none of your money.  If you buy a distressed property and quick flip it to a rehabber you can use private money (real private money, not the fake private money lenders who are just hard money lenders in disguise) for short term financing.  Go to a local real estate club and be active and you will meet people with money to lend short term.  Many private lenders will also lend medium term, less than a year, if you are going to fix and flip.  You don't need many .  I have four, plus one hard money lender, that will fund for me (one of my doctors, a neighbor, the owner of a restaurant I go to, and another real estate investor).  You could use two lenders on a deal, one on a 75% first note and a second on a second.  There is a big myth that money is hard to come by.  Nothing could be farther from the truth.  There is a lot of money if you buy correctly and make the right connections.  Remember, you make your profit when you buy, not when you sell.  As to Robert Allen, he filed bankruptcy several year sago and even said that NMD is easy, the hard part is paying the mortgage, because he didn't teach buying wholesale.

Patrick, it depends on the list you are after. For a list of homeowners with equity, private note holders, foreclosure lists, etc., listsource, RealtyTrac, SiteX, and DataQuick are reasonably accurate. Key word is reasonably, because they all use what is called Automated Valuation to arrive at their values. Each has their own algorithm. In a rapidly rising or falling market these values will be a little behind the times. Some sites, I use DataQuick, also provide comps. The comps are more complete than an MLS because, as NAR says, 25 - 26% of all houses are not bought or sold through an agent (MLS). The services above pull from county records. But none of them are an excuse to not do your own due diligence, including driving the comps. I haven't heard of probate investors who use usprobate, but somebody must.

I agree with Rick that a shotgun approach will prove too cumbersome.  To be successful, there is much to learn in each category you listed.  Ron Mead has excellent information on probates.  Alexis McGee has some good information on pre-foreclosures and foreclosures.   Due to credit privacy laws, a 30-60-90 day list is virtually impossible to get because these borrowers are not yet in "default" (generally considered 90 days since last payment.  Learn the market.  Buying foreclosure houses at the auction is now almost worthless in major California cities due to high bidding, collusion at the auction, and major hedge funds still bidding at or near full retail.  Bankruptcy I don't recommend for beginners.  It's complicated, time consuming, expensive (research costs in the federal PACER database add up quickly,) and you will need to learn some basic BK terms and federal rules.  I recommend pre-foreclosures (virtually no realtors know about these or don't market well to them), or probate as good, potentially profitable niches.

Bankruptcy is a federal court process.  The county clerk (or Recorder's office) seldom gets recordings of BKs.  For bankruptcy you have to research the federal court's data base, www.PACER.gov.  This can get very expensive if you don't know what you're doing since they charge $0.10 a page to view (with a very few exceptions.)  It adds up very fast.  A better source is to find a foreclosure reporting service that shows all the Postponement reasons.  For foreclosures postponed by BK, you would use the creditor's name to search PACER to see if the BK was either dismissed or the lender got a Motion For Relief of Stay granted.

Keep in mind that the County Clerk's office, often called the County Recorder's office is different from the Superior Court Records office.  They may or may not be in the same building or room.  It's a great idea to combine your research.  The Recorder's office is where you would search information on specific properties (liens, title holders, foreclosure notices, etc.) and the Court Records office is for researching specific court cases (probate, divorce, small claims, criminal, etc.)  While you are there, if the Tax Assessor's office is nearby, you can search the property tax status of a property and see if the mailing address of the tax bill is different from the property address.

In my, non-attorney, experience, it is impossible to get a discount price for a property from the BK Trustee while the bankruptcy is open, for a couple of reasons. First, always remember that a BK Trustee's number one responsibility is to see that all creditors are paid as much as can be recovered from the assets in Chapter 7 or through a 60 month payout of arrearages plus current payments in Chapter 13 during that time. They have no interest In you getting a good deal. Second, in the courts I'm familiar with (Northern District of Calif.) the trustee (or the creditor) is required to first get a BPO of FMV from a licensed RE broker based on the current condition of the house (there goes your discount.) If the trustee takes control of the creditor's assets (typically Chapter 7) they will only sell at no less than 90% of that value or at public auction. Since bankruptcy is a federal law in federal courts, I would guess this applies to all BK courts, but others may know something different. The only way to get a property at a wholesale price is to wait to see if either the lender files a Motion for Relief of Stay and it is granted by the court, or if the entire bankruptcy was dismissed by the court for some reason. The most common dismissal reasons are failure to file all required documents timely with the court or failure to make plan payments. I've seen some be dismissed in as little as three weeks but some can take much longer. You would then deal directly with the owner who probably needs cash. BK investing is complicated, can take a long time, and be quite expensive. The per page charges of the federal court PACER system add up fast for case research and you do need that research.