I have been involved in probate real estate investments (flipping, listing, and buying) for over 30 yrs and it’s been nothing short of a goldmine.
What I found out over this period of time is attorney’s don’t study probate law by itself, but one of the courses they take in law school. I have heard this comment over and over. Estate Attorneys do Family law which includes Probates, and most attorneys I have spoke with consider Wills their retirement funds.
What has amazed me about Probate Law is the fee the attorney receives. What caught my attention about this fee is that it's based on the gross assets of the estate. So for an example, let’s say the deceased had $150K life insurance policies, $50K in the bank, stocks worth another $100K and a home worth $500K, the attorneys fee is based on a percentage of the total gross dollars in assets. In this case $800K. The attorney would receive a fee based on a percentage (sliding amount) which can be thousands. The funny thing about this is they don’t take into consideration any of the debt associated with these assets. If there is a mortgage of $300K on the house it doesn’t lower the house asset to $200K. I found this very hard to understand.
Another Probate Law issue I have is there is really no system in place from what I have experienced over the last 30 years working specifically Probate Real Estate. I still am yet to find a system to assist the petitioner who's going to be the executor/administrator.
These people for the most part have never undertaken anything like the experience in being an executor in probate. They're usually kept in the dark on the process and when they do speak to someone at the estate attorney’s office, it’s usually the Para-legal. I can’t tell you how many times I have sat face to face with a petitioner who was so confused and unsure of what they were doing. Something needs to be done to help this situation out.
To make matters more complicated, in California there are two ways to probate an estate.
One way, is through the Court Confirmation process and the other thru the I.A.E.A.
I buy probates through the I.A.E.A so I can pull the estate home out of the probate process, avoid the 10% deposit, the 90% of appraisal rule and the “As Is” situation.
This enables me to make bargain buys of real estate property and make a profit when I go to resell.
The petitioners love me because I remove a big burden off their shoulders by buying the house. Also, I give them an option to place the house on the MLS since I’m an agent, I use my probate expertise and show them how to net more sale proceeds.
For the most part, the probates I have purchased over the last 30 years, the petitioner didn’t care about the discount as it was more important to get rid of the vacant house.
The DF Probate Real Estate System teaches all this.
Our Probate law has to be revised to treat the sale just like a regular real estate transaction.
Under the I.A.E.A in California there are checks and balances to make sure everything is right and the heirs agree, we have no need for the old probate law which involves too much red tape but most importantly hand cuffs the estate from entertaining offers to purchase from retail buyers looking for a home to move into and willing to pay retail.
The old Probate Law (calif) usually attracts only the investor looking for a wholesale purchase. I will say I have profited over the years from the probate laws but I still feel we should only use the I.A.E.A probate procedure and better yet, everyone with assets over $250K should be required to have a Living Trust.
Probate law is necessary to protect the estates but it needs to be revised to have a uniform easy to follow procedure for the executor with the estate attorney who is making these large fee’s required to do all the tasks of the executor.
From having probate investing students all over the Country, I have found all the States are different in some way with their Probate law procedure and California is one of the strictest and most confusing States to probate an estate under. Time for someone to step up and change the system.
But if you live and work outside of CA, according to John T. Reed, the DF system is the best probate real estate system available to you.
I love probate real estate simply because most agents and investors avoid it…all because of a lack of knowledge.
Don’t let this happen to you. Take advantage and learn a proven Probate Real Estate system that will help you, your business and your family.
It’s a lifestyle changer…that’s for sure.
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