I am currently working with a probate lead. I am in Texas. There was no will.
The administrator assigned to the estate is the mother of her deceased son. There is no money in the estate and the administrator is elderly, living on a fixed income. She cannot afford the mortgage. She doesn't expect to see any money in the process. She just wants this house gone.
The property is 30 months behind on the mortgage, but a sale date has not yet been set. I already have a 3rd party authorization from the administrator of the estate and talked with the lender (big bank) yesterday. I am also a Realtor. I'm thinking of two different strategies and would like to know which you think is best, advantages / disadvantages of each:
A) Offer the lender a cash purchase of the property under a short sale
B) Offer the administrator of the estate a subject-to then offer to purchase the nonperforming note with cash from the lender
Thanks for your input!
Has the admin opened the probate, been assigned as Admin by the court/given powers? Typically, that requires a retainer from the attorney and court fees. Most admins with no money don't spend money to probate an estate with no money.
I think your chances of buying the note are very small. If your Admin has powers to sell, I'd work the short sale angle. You'd think that a deceased borrower on an upside down property would be enough motivation for a lender to work the short sale. But don't be surprised if you get asked for all kinds of hardship documentation and stuff typically required of a living borrower.
Thank you, K. Marie.
Yes, the admin opened the probate, it has been assigned to her and she has power to sell. She did hire an attorney to do all that and she is still being charged by him, although she hasn't been paying. This has been going on for 5 years. I would think he (the attorney) would want this off his books as well. There were other properties in the estate she was able to dispose of, but this last one is hanging on because it's in pretty rough shape. I'm leaning toward the short sale, but another investor friend suggested the subject to - nonperforming note angle. So I came here to get opinions.
Thanks again for your input!
agree with @k.marie on your chances being slim to none on buying the note out.
Good luck and please keep us posted!
I have had good success getting approvals with probate / shortsale properties (less paperwork because the borrower is deceased) but the discounts have been @20% of FMV (which if the house needs a lot of repairs works for me (I provided constrution bids, police reports, ect...).
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