My first post to the forums. I've been hiding out, listening to the forums and planning to make deals! I'm the person that likes to plan on making plans. I think I have something that is edging me forward. Onward!
My wife owns a hair salon in a nice suburb on the "Main Street". Its busy and business is good. We share the building with 3 more units. One of which is occupied and the other 2 are unrentable in desperate need of renovation. The owner suddenly passed away. He was a great guy and we miss him. He left no will and has a daughter who is 24 and to my knowledge wants nothing to do with land-lording.
We want the building but want it at the right price. I would imagine that all of the owners assets will be going into probate and the process could take awhile. Because the town is centered in an affluent area, it commands high rents and holds value. The building has 4 units and it is my understanding that buildings with 4 or less units are valued by the seller based on comps. I'm sure a wise buyer would value the property based on income.
I know little more then what my wife pays in rent, but would imagine it could generate between 4 - 5k per month. I need a strategy!
Any advice would be greatly appreciated!
his estate will have to go to probate court. The daughter may end up with the property. Make sure she knows you are interested in the property, when the court clears everything. Then make a fair deal with her and buy it. I don't understand your ideas on valuations. The buildings are worth what a willing buyer will pay and a willing seller will accept. If she is smart, she will get an appraisal or at least a competent commercial realtor.
To see what similar buildings are worth, check out loop net. That will give you an idea of what the area is going for.
Absent an heir or creditor (of this intestate estate) opening probate, it is not automatic that the estate will be probated.
If you wait until probate is open you'd just be another prospective property buyer, albeit a well place prospect. If you can strike an agreement to buy on seller terms whereby you and estate's Administrator (likely the Daughter) agree to a price and they carry a note for the balance of the equity for X years and payments of Y, then the estate seller can avoid the cost of sale using a broker.
Negotiate the longest term for your "purchase money carry back mortgage" and remember that there's a high chance of further opportunity to discount that note should the seller push for their money early and you choose to refinance.
Alternatively, If you buy the Daughter's inheritance, called an assignment, you step into her shoes and must satisfy other creditors as well as the legal cost of probate, however you'd have maximum control over the outcome since you could theoretically choose who is appointed administrator and selection of the attorney.
Sometimes heirs will almost "give away" a property for a token cash amount, just because they do not want to deal with it. If I were you, I would try to obtain an assignment. If you need help with the probate, let me know.
Like @Dave Metsker alluded to this could be an opportunity to get a good deal from his young daughter who may want nothing to do with the property and be some what naive in regards to the value. I'd try to get in contact fast and find out the status of the estate. Is this in Ambler?
Thanks for the quick and informative replies! I'm in the midst of a Disney vacation with little time for business. I've set up a meeting with the Family friend who appears to be helping the daughter. I hope to learn more and am sure to have questions. Thanks!
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