Hi, I recently was contacted by a lawyer representing a client who owns a property they received after the death of their mom. I was able to speak with the client personally and we arranged to meet at the property yesterday so I could calculate any repairs that needs to be done. Well, once we met there, the executor was unaware that the city boarded up the property and it's now in receivership due to violations on the property which we briefly spoke about before. He gave me the number of the person to contact. The property from the outside looks like it may be a total gut rehab however there isn't a mortgage on it. I was looking to wholesale this property but I do not know if I should move forward. I don't understand how the executor owns the property but it's in receivership by someone else! Can I make this work?
So he gave you the number of the person controlling the property in receivership? If so call them. See what needs to be done to buy this property.
Don't give up. This is how you get a great deal.
You found a property that nobody wants, it ended up in receivership because nobody is taking care of it, it needs work, it needs value added and that is how we make money in RE.
To say the least it will be a great learning experience.
@Paul Sorgi I'm going to give them a call today!
I agree this may turn out to me a great opportunity for you to take advantage of as long as no major liens or judgements pop up on you. Big brother has a sharp knive that likes to cut in all the time.
An executor never did "own" the property. An executor is someone named in a will to execute the wished of a decedent. They may or may not have any beneficial interest, however having any does not make them an owner. What dictates their powers are court orders that confirm their capacity, powers and authority to sell or encumber or distribute upon order for final distribution.
A receiver being appointed, in essence, says that the executor fail to sufficiently marshal the estate asset (real estate) and the receivership was established to satisfy the local code enforcement or similar agency concerned with the property. Receiverships are expensive and tend to take a big chunk out of the equity of a property. I agree with previous posts that hanging in there in this file will either yield a deal or a worthwhile education.
I spoke with the lady today who had the property in receivership. I asked how to get it terminated and mentioned I needed to access the building because I am a potential buyer. She then explained that the receivership was terminated last September and there was a lean placed on the property for $1820 with 9% interest in which she is unaware if the interest started accruing. I plan to talk to the probate lawyer Monday to request financials and I also found that the average rent for 1bd in the area was $700 in which this property has 6 1bdrooms. The property is vacant and boarded by the city. After evaluating the financials and finding comps, how can I come up with an offer if the property is boarded by the city.
@Sharlisa Elzy Interest is probably accruing. That generally starts to happen as soon as the lien is in place.
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