HUD 95% rule for estates (reverse mortgages) and "creating" a deal

[Jaron Walling]

I'm looking for advice from other investors who have found success buying distressed properties from an estate. These properties are typically underwater and need a lot work. I've done some due diligence on property that I'm quite familiar with. We lived across the street from the property and know the backstory. Long story short the living heirs have signed a Deed in Lieu of Foreclosure and now the property is stuck in an "estate limbo". 

The property has been vacant the last 3 years and court case shows it's in the 6th motion for continuance. That leads me to believe it's nearing the end. I'd think there's motivation to get this estate closed and the property sold before it goes to an auction. 

This property could be an opportunity if the HUD appraisal comes in low enough to create a deal. If it goes to the county auction my chances of buying for a good price goes down. If anyone has experience dealing with reverse mortgages, attorney negotiation, or 95% rule for appraisals I'd love to talk about it.

Thanks

[Chad U.]

Quote from @Jaron Walling:

I'm looking for advice from other investors who have found success buying distressed properties from an estate. These properties are typically underwater and need a lot work. I've done some due diligence on property that I'm quite familiar with. We lived across the street from the property and know the backstory. Long story short the living heirs have signed a Deed in Lieu of Foreclosure and now the property is stuck in an "estate limbo". 

The property has been vacant the last 3 years and court case shows it's in the 6th motion for continuance. That leads me to believe it's nearing the end. I'd think there's motivation to get this estate closed and the property sold before it goes to an auction. 

This property could be an opportunity if the HUD appraisal comes in low enough to create a deal. If it goes to the county auction my chances of buying for a good price goes down. If anyone has experience dealing with reverse mortgages, attorney negotiation, or 95% rule for appraisals I'd love to talk about it.

Thanks

Do you know if HUD is still the mortgage holder?  If the heirs have signed a deed in Lieu foreclosure then it is no longer part of the estate, therefore, the mortgage holder should be able to sell it.  The 95% is only applicable if the heirs plan on redeeming the property or selling it in a short sale.