Big profits, less work

One of the most profitable and most overlooked areas of real estate investing is probate estates. Probate simply means that the owner of the property is deceased and the property is in the hands of the executor of the estate.

The goal of most executors is to liquidate the estate as quickly as possible so that the cash can be divided among the heirs. Most heirs are more than happy to accept a reasonable price for the house because they can’t split the house three ways as easily as they can split the cash from the sale.

One of the great things about probate estates is that you can often make extremely large profits without using a penny of your own money. I will repeat it: you do not make any investment, but you make great profits. If you have to spend your own money, it will be a smaller amount (less than $100) to pay for filing fees, copying, and access to information at your local probate office, usually located in the county clerk’s office.

As with any property, you are looking for specific probate properties that meet your needs. The property should be easy to sell: typical three-bedroom, two-bathroom single-family homes are best. Unless you live in a place like Manhattan, where a one-bedroom studio can cost a million, or in a place like Chicago, where demand for one-bedroom, one-bath condos has pushed their price to near $300,000 or more, you’ll want to stick with standard working-class neighborhood homes.

The other requirement for the house is that it must be slightly dilapidated. It is NOT ready to be condemned by the city, but it needs some work to be ready for the market, work that the executor does not have the time or inclination to do.