Is the lawyer going to kill my probate deal!?!?!?!

16 Replies

I recently found a really good deal in my home town. This is a probate deal I am working on. The person who owned the home died and it says in the will that the home must be sold and the money received from selling it will be split between the heirs!

* there are 4 heirs

* the executor of the estate lives outside of the city and so does all the heirs

the ARV is 125k and the repair costs are 2k

I told the executor that I could giver her 60k cash and could close in 15 days. (15k per heir).

The executor told me she doesn't know if she can sale the home.  .... I told her to call her attorney assigned to the probate estate.

DO you think when she talks to the lawyer he will tell her something that would make her back out!?!?!?!?!?!?!?!!?

THIS IS MY FIRST TIME TRYING TO WHOLESALE

First, can you absolutely positively close in 15 days from when they accept your offer?  Will you buy it yourself even if you don't find a buyer?

The key thing the lawyer may say is that there may still be steps that need to be taken to resolve the ownership.  Depending on the ownership structure and the will it may take some time to get this resolved.

I'd hope the lawyer will tell her to consult with a few agents before making any deal. If its worth $125K and needs only $2K work it should easily sell for something much closer to $125K if it was listed on the MLS. Even after commissions these heirs would come out far ahead of your offer. If they accept a $60K offer knowing that its really worth $125K then that's their call. If they do it not knowing any better, then you may hear back from them later.

1. I will not be purchasing the home, I am wholesaling it to an end buyer! I do not have a buyer yet but I am currently telling investors about this. If I don't find an end buyer honestly I will back out of the deal..... I hate to say that but I don't have the funds to purchase it myself

2. Thanks for your professional advice @Jon Holdman  

 .....

@Michael DuVentre  

@Jon Holdman  

 is correct.  Often the attorney will recommend that the estate list the property with a realtor (often his golfing buddy), in order to maximize the proceeds to the estate.  It would be up to you to convince the executor to do business with you, rather than to wait 60-90 days to get more money.  If you were the executor, and had to account to your brothers and sisters, what would you do?

Originally posted by @Dave Metsker :

@Michael DuVentre  

@Jon Holdman  

 is correct.  Often the attorney will recommend that the estate list the property with a realtor (often his golfing buddy), in order to maximize the proceeds to the estate.  It would be up to you to convince the executor to do business with you, rather than to wait 60-90 days to get more money.  If you were the executor, and had to account to your brothers and sisters, what would you do?

If you were the executor, and had to account to your brothers and sisters, what would you do?

If we are not getting along despite DNA tie's and I was the executor/administrator I wouldn't tell them. But as an heir and my brother was/is the executor/administrator and he didn't tell me and I have already started communication with Michael I'd asked Michael after consulting with my own attorney if Michael could buy out my interest in the property. Michael when then draw up a contract for 30 day's which would give Michael breathing room. As an heir to the property I'd probably file a competing probate case file with the estate or file a "Request for Special Notice" (CA probate code 1250-1252)

Originally posted by @Michael DuVentre :

1. I will not be purchasing the home, I am wholesaling it to an end buyer! I do not have a buyer yet but I am currently telling investors about this. If I don't find an end buyer honestly I will back out of the deal..... I hate to say that but I don't have the funds to purchase it myself

2. Thanks for your professional advice @Jon Holdman  

 .....

Its this type of thing that drives many of us Nuts.. here you are you have no ability to close unless you find someone.. this to me is just so wrong on so many levels.. I am not sure where others stand.. but from my point of view get your funds together first then go shopping your just wasting everyone's time..  And of course if you can't do it you simply back out this gives the industry a bad name... ITs wrong to go into the deals with no capital lined up in my opinion.

thanks for t

THANKS @Dave Metsker  @Mark Pedroza  !!!!

@Jay Hinrichs   actually...

Me and the executor have communicated many times over the phone . Nothing is set in stone. Me and the executor are still ironing out details. I told her there is no rush to do anything as of yet , signing a contract wise. So while me and her are still talking im looking for investors for this POTENTIAL deal.

No ham. No foul.  

  

I told the executor that I could giver her 60k cash and could close in 15 days. (15k per heir).

. I will not be purchasing the home, I am wholesaling it to an end buyer! I do not have a buyer yet but I am currently telling investors about this. If I don't find an end buyer honestly I will back out of the deal..... I hate to say that but I don't have the funds to purchase it myself

Uh....isn't this called lying?  

@Michael DuVentre  

  I know where your coming from because if you reading on BP this is an accepted practice by many who flip houses...

Being Old school I just personally think its wrong to be talking about doing deals when you have no ability to close.. I know as I said many think this is perfectly fine.. I just personally do not think it is... In my mind if you have funds and good intentions going into the deal that's one thing.. But to just be slinging stuff up on the wall to see what sticks is just not an ethical or honorable way to go about being in the business.. Its just my personal opinion and there are many who think I am full of crap but hey no harm no foul right.

oh no! @Jay Hinrichs  

 I don't think you're full of crap .... .... no matter how many others you say think you are!

in regards to my ability to close, I believe I can close! I have talked to the executor and I did tell her that I could close the deal. I have expressed that I can close........ verbal agreement. I told her , I know how difficult it is for her at this time for being the personal representative and grieve at the same time. I told her I wanted her to consider my offer and for her to take her time!

I gave her a verbal commitment but no contract. So if she has to take 3 or 4 more weeks grieving and liquidating other things in the will , its best! In the meantime I will take this time to continue to look for investors.

and in the event that I can not.... I will tell her, mam I don't believe I can close on this.    

Jay Hinrichs, its people like you that I look up to! I want to be a developer, like you.... an investor.... an entrepreneur!   Im a newbie....   but hopefully one day with guidance I can be as successful as you! Im not going to be a know -it -all -or as savvy as the next person, but every day is a step closer, so you may think its "mudd" but the purpose of me asking the question in this forum was for savvy individuals like yourself to educate me instead of using rhetoric to tear me down.   

since your old school im pretty sure you have heard the term, you can catch more flies with honey than you can with vinegar,"   .... ...

Originally posted by @Michael DuVentre :

Me and the executor have communicated many times over the phone . Nothing is set in stone. Me and the executor are still ironing out details. I told her there is no rush to do anything as of yet , signing a contract wise. So while me and her are still talking im looking for investors for this POTENTIAL deal.

No ham. No foul.  

 First, it is "... the executor and I ..."

Second, if the lawyer is properly performing his/her role, s/he will advise the executer to take the route which will best benefit the estate and, consequently, the heirs themselves. The executer herself has an obligation to act in the best interest of the estate (at least here she would). Even if you convince her to enter into a contract with your at 50% of ARV, she will have to sell it to the other heirs - a particularly difficult task if the lawyer is advising otherwise.

Finally, if you are going to make your pitch on being able to close with cash in 15 days, you should be providing proof of funds along with your offer.

@Michael DuVentre  I think you are missing what Jay and others are saying.  They are not attacking you, they are making the point that telling someone you can close in 15 days is not fair to the seller.  Now if you were telling the seller, hey might be able to find someone to buy your property and explain what your doing, at least your are being upfront.  The best scenario is to already have something locked up or the ability to close- so you aren't leaving the seller hanging if you don't find anyone and you have a better case for intent.  Even looking at your best interests, the last thing you want to do is try and close a deal that you cant close- that effects the way everyone involved feels and 1 time can be enough to effect you reputation.

@Pete T.  

  I am all for making deals my point is if your going to do this... then there is a logical order.

and the first order of business is to get your financing lined up.. Or your money partners or your lender.. then go shopping.. ITs a small community if you get black balled for writing offers and tying up properties then never closing it makes it harder down the road.. and makes it harder for others as well.

Going through this myself , at least in California my mothers house was assessed ( at the time of her death) by an appraiser and that was the price it should sell for. I would think an appraisal will be in order so everyone gets their fair share. Once it is submitted at more than your offer I would think they will ask for more. Just my opinion.

@Michael DuVentre  I'm not opposed to trying to buy a super-bargain. 

However, the very theme of your post is based on a lack of confidence and your ability to close. 

Whether the hurdle is an attorney, non-unified heirs, a lack of a written agreement or your unfamiliarity with probate, nothing sends a message like the ability to close a deal with funds that you control. 

Putting your money or money that you have borrowed and gave your name, credit, character and reputation on the line for, does something to the psyche that I can't explain. 

Being ABLE to close says a lot.

If it were me, I'd get the deal under contract, then get all the heirs under contract, then the attorney has little choice but to go along with the program.

Also, offering $15K X (4) heirs is great. Does your math pay the attorney? Do you know what his/her favorite radio station is? WII-FM (What's in it for me?).

BTW, Jay's on your side. You're just in too much fear to recognize who your friends are.

This strikes me as all wrong. How many times have homeowners, heirs, etc been led to believe they will have a sale only to see someone walk away simply because they were not qualified to complete the deal. Making a promise you are not sure you can keep is worthless. You stated you will simply walk away if you cannot find funding or a buyer. I do not feel this is ethical in any manner. You are building hopes and expectations from people seeking a resolution to their situation and are not prepared to keep your word? Back up, start over, and get things in order before making promises you are not prepared to keep. Then, when you make a promise (sign a contract) stick to it. That is what builds a business.

I will not be purchasing the home, I am wholesaling it to an end buyer! I do not have a buyer yet but I am currently telling investors about this. If I don't find an end buyer honestly I will back out of the deal..... I hate to say that but I don't have the funds to purchase it myself

Then stop LYING to the executor!!!  I know gurus tell wannabe wholesalers to put weasel clauses in their contracts to get themselves an escape route.  And to lie to potential sellers and state only that they are going to buy the property.  I think this is a very sleazy way to do.  This is the kind of thing that gives real estate "investors" a bad reputation.  If you're going to write a contract saying you will close in 15 days, CLOSE IN 15 DAYS!!  If they accept your low-ball offer its likely because of this quick closing.  So honor it. 

If you can't, don't write your offer like this.  Best would be to write a contract to try to find a buyer.  That is, a listing agreement.  But that's unlicensed brokering (which is ultimately all wholesaling is, though regulations and codes of conduct would prevent an agent from doing this deal without making the seller completely aware of the true value.)  But even without doing a listing agreement you can be upfront that you have no intention of actually buying the house and the purchase contract is just a mechanism to avoid being an unlicensed broker.  And that if you can't find a buyer, you're not going to buy it yourself.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here