I'm living in one of my triplex units, and I would like to start looking for a single family to move into. Renting the 3BR 2BA unit I'm moving out of would pay the PITA on the next property.
I've been eyeing a property around town, because it appears like it has never been rehabbed and has a HUGE yard. I'm in a college town, so a yard like that has nice potential for a mother in law cottage/second rental, and I want to be able to put up a shop down the road. The house itself is a 1600 sqft 3br 2ba.
Yesterday I finally stopped by the house to see if the owner was around. This is what I learned between talking to the resident (the son) and a little research online.
- The owner passed away a couple years ago, but is still on the deed.
- The son hasn't transferred title.
- The son is behind on his property taxes.
- The son works in a kitchen and doesn't have money to take care of the place.
- The place was a mess - hoarding and junk everywhere.
- Yard is mostly dirt.
- It needs a total rehab.
I'm sure the son owns the property free and clean, his mom was in her 90's when she passed and has lived there over 30 years.
How would you proceed with a deal like this?
Think he would go for you assuming back taxes for the deed? You could even throw in some discounted or free rent at your triplex to sweeten the chances for low out of pocket cash.
This is a classic pre-probate, distress sale situation.
There may be a number of hurdles that could pose challenges.
One is a lack of a will. If the Son is not the decedent's only offspring, other heirs could interfere with your planned transaction. Someone will need to file for and serve as the personal rep.
Unsecured creditors may arise that could inflate the amount required to settle the estate.
If the PR sells (to you or another) without paying the debts, they will be in breach of fiduciary duties.
Of course, these are just scenarios. In any event, someone will need the capacity, powers and authority to pass marketable title to you. If it were me, I buy with seller financings in order to work out the title and terms details.
In the meantime, you can seek to control the opportunity with an asignment and a way to cloud title that thwarts would-be competitors from snaking your deal.
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