A friend called to ask my advice today. His wife's father recently passed away and left 2 residential properties in NJ. Both properties are free and clear. One of the properties is tenant occupied. The other was the deceased person's home and now vacant. I pulled the reports on both properties with the total market values and ARV. My friend says they just want the properties sold as soon as possible to quell any family disputes. He knows that I'm learning about RE investing and called me first, of which I'm grateful. I have not done ANY deals as yet. So hopefully this will be my first. I know the first thing I should do is find out who actually has LEGAL RIGHT to sell the properties and talk to them first. I don't want to get involved in a family fiasco! I know the second thing is to get a contract signed. The third thing is to do due diligence by making sure that no one else can lay claim to the property ie; a WILL with beneficiaries. Is there anything else I should be checking for? Should I pass on this complex deal and just let someone else more knowledegable handle it or just JV with another seasoned investor and spit the assignment fee?
@Alethia Hines You should find out who the seller is and get it under contract for a fair price either way. Opportunities like this do not come up everyday. You will also want to look into your financing options in case you decide to close on one or both of the properties.
Thank you for that advice! I think I may try to wholesale them to a buyer or another investor. This family wants to sell "as-is" including property contents. They just want to be able to walk away from it. As far as financing options, I would need a hard money lender for that. My friend says they're really in need of the money, so I pray that can make an offer that everyone would be happy with based on running the numbers. I plan to dig for more information before I make any moves on it either way.
@Alethia Hines Also remember speed is essential. You want to move really fast on those types of deals as the family just wants to get rid of it. If I were you I would not wholesale them or jv. You should reach out to an real estate agent/broker who is experienced in these types of deals and will represent you. Let that person do all the deal making so as to put distance between you and them. The agent/broker knows how to deal with all the complications to make that deal work. Get a hml lined up too. Hml is expensive but they are perfect for deals like that because they can move quickly. Once you have all that in place, you have a couple of options. One is to put it on the mls at a significant marked up price for a possible double close, if you don't want to do the deal yourself. 2nd is to fix it up and flip it ( be mindful of taxes and the time that you will have invested in the deal to see if the deal is worth it). 3rd do the bare minimum and rent it all out. If its the 3rd choice you will need to be concerned about financing as hml will eat up your profits.
You need to know who the heirs are on each property and if probate has occurred yet. You need to do full walkthroughs of each property to account for repairs and/or unpermitted violations. What area of NJ? Depending on that, you want to assess the ARV based on true MLS comps and understand the full repairs before which will be more than cosmetic if it was owned by someone who passed away. Deferred maintenance is usually present.