Probate Real Estate - Probate ProfitsProfits of $25K to $45K per real estate flip are what I have been targeting for the last 20years. I have had an untapped market and what I want to discuss. 95% of investors andagents dont understand the potential Probate Profits they have been missing. Before youcan realize these rewards, you have to understand the probate laws and process in yourarea, have general real estate savvy (contracts, finance, appraisal, escrow), and the properpeople skills in order to deal with the executor, heirs and estate attorney. You will need toknow how to structure your wholesale purchase and then present it to the estate or orderfor them to understand the math. I have been teaching my DF students how to do thissince 1992.Lets talk about the Probate Profits you can expect in this real estate niche. Depending onyour areas prices, you want to target a minimum of 10% net profit based on thewholesale price your paid for the property. Your success with Probate Investing will bedependent on how you understand the process and who is mentoring you till you find thatsuccessful probate flip.To give you an example lets discuss doing a flip. I find a probate that based on mycalculations will bring a retail sale of $500K. Based on my DF system, I do a 2 steppurchase process and providing everything goes right, I will look to purchase this probatearound $400K. So based on my final $400K purchase, I will be looking for a net ProbateProfit of $40K. So lets break the numbers down. I purchase the house and have closingcosts of $10K. Im going to probably make 3 loan payments while I fix and flip and basedon P.I.T.I I will probably make around $10,000 in payments. The fix up on the house was$20K and I have resale costs of another $20K which includes a selling agentscommission and title costs. So looking at all this my total costs are around $60K less myresale price of $500,000 leaves me sale proceeds of $440K or a $40K profit. Now if youin State like California which holds 3 1/3% for non-owner transactions for State tax, youwont receive $40K but $25K at closing and a credit of $15K with the State when you goto do your taxes the following year. A way around this is to 1031 the resale and roll allyour profits into the next deal for form a LLC. Probate Profits of $40-$60K on flips oneto four times per year isnt too difficult if you know what youre doing.As an Probate Agent Im earning great commissions selling probate homes I cantpurchase wholesale to other investors who want to keep long term and a 10% discount isfine or to end user buyers wanting to move in who love a 5% discount. Probates is a SixFigure opportunity for Investors or Agents and even better for Invest/Agents.In 2010 Im devoting more time for my DF Students, holding probate club monthlymeetings to network for my students, and 1 day refresher workshops for my students tofine tune the system. Im looking for more flips now in 2010 as the real estate climate isripe again. This has been a wonderful 22+yr career for me and I want to spend theremainder of my working years passing on the Probate Knowledge I have learned toothers so they can reap the Probate Profits in their real estate investment plan.
I teach 5 levels of Probate Profits dealing with estate homes and not all the systemsinvolve purchasing the probate property. This should be of particular interest to the REagents out there as they can also learn to list and sell probates and increase theircommission along with buying and flipping for themselves.