Probate = Motivated Sellers and Big Profits By Dennis Henson
Seven Secrets of Success in Real Estate Investing 1. Get your mind right 2. Seek Wisdom 3. Develop Skills 3. Develop Skills 4. Make detailed plans 5. Take massive action 6. Form great alliances 7. Be persistent
5 M s of Real Estate Investing Mining Money Maintenance Marketing Managing
Probate = Motivated Sellers and Big Profits By Dennis Henson
What is Probate Dictionary Says A court-supervised process by which a deceased person s property is sold to pay off debts and to distribute the proceeds to the rightful heirs.
I Say
Facts About Probate Over 6 Trillion of Real Estate in U.S. 80% of Probate Files include Real Estate 67% of the properties are Free & Clear 1 st Probate Court was est. in 1784 Over 230 years!!
Investor Benefits Because it is a pressure cooker Motivated sellers Many with high Equity Usually with none of their own $ invested May not be emotionally attached Not a lot of competition
Other Benefits
1726 Northbrook Ct ARV $174,900 Paid $80,000
6629 Ellis Rd Sold $124,900 Paid $40,000
707 Castel Oaks Ct Sold $186,000 Paid $93,000
Perspective A Black Cow? Right?
Perspective is Important
Death Probate Process Family Perspective Probate opened & file created Personal Representative & Attorney Property distributed Real property sold Money distributed File closed
Personal Representative (PR) Someone must take over responsibility Personal representative Executor Administrator
Probate Process Personal Representative Death Accept responsibility to handle estate Probate File Created Income for estate stops but not bills Costs start adding up Insurance becomes void Takes a lot of time and effort Heirs want money but have to pay
Duties of Personal Representative (PR) Decide if there are probate assets Locate assets & manage them Collect and receive payments due Set up checking account for money owed Decide who gets what and how much from the will If no will--state law & determines heir's share Value or appraise the estate's assets Give legal notice to creditors of probate proceeding Give deadlines for creditors to file claims
And More Duties of the PR Handle ALL details Pay funeral bills, debts, and valid claims Investigate validity of claims against estate Pay continuing expenses-- --mortgage, utility bills, insurance Disconnecting utilities, end leases & credit cards Notify banks & government agencies Social Security, post office, etc. File tax returns and pay income and estate taxes Do final state & federal income tax return Get court's permission & distribute property File receipts for distribution And wrap up any closing details for estate
The PR May be Held Liable for Overpaying creditors Not filing tax returns on time Selling an asset an inappropriate price Selling an asset without authority to do so Improperly managing the assets of the estate Distributing property to the wrong beneficiaries Failing to collect claims & money due the estate Distributing property before creditors have been paid
Probate Process for Investors Research to find addresses Send letters Take calls Determine prospects See property Solve problems Close fix up Market and make a bundle
Be a Problem Solver For the PR Stop the costs Take away the work Get heirs paid and off their back Help end the nightmare
Step by Step 1. Find contact information 2. Contact the Personal Representative 3. Decide if you want to see the property 4. Visit property and prepare offer 5. Meet Personal Representative 6. Negotiate deal 7. Obtain funds and complete closing
To Find Contact Information Visit estate sales Look at legal notices Visit probate court Contact probate attorneys Do research at the courthouse Hire research done
Go to Estate Sales www.estatesale.net Don t take We Buy Houses Card Learn a Script
Visit Probate Court
Call or Visit the County Courthouse Ask address of building with Probate files Ask how files are available Books Local computers On the Internet Ask what is allowed in the building Pen and paper Lap top Scanner
Look up Files On Internet or at courthouse Find where Probate files are stored Ask for help with search and tips Is there a search for Real Estate Do you know someone to do research
Researching Files Take pad, laptop or scanner to capture leads Probate files are sequentially numbered Usually two digits are year the file was opened Example, first file of 2009 would be 09-0001. 0001. Get files going back three months or 100 numbers Note the file number where you stop Next time start where you stopped
The Information Case Number Name of decedent Address of decedent Personal Representative (PR) PR s address Case attorney Attorney s contact information Other heirs and their addresses Note-- --Do not try analyze the estate papers
Step by Step 1. Find contact information 2. Contact Personal Representative 3. Decide if you want to see the property 4. Visit property and prepare offer 5. Meet Personal Representative 6. Negotiate deal 7. Obtain funds and complete closing
Contact Personal Representative Wait for at least six weeks Send letters to Personal Representatives Kind of envelope is important Hand address the envelope Hand written letters work better Keep it simple & offer to solve problems Put this with your important papers
Letter to Personal Representative
Send Letters to the Attorneys
U.S. Mail Buy a good Probate Mailing List Use a tested letter or card Do mailings on a schedule
Activity Example 1000 Letters 20 Contacts 14 Viewings 10 Offers 1 Purchase
Step by Step 1. Find contact information 2. Contact the P R 3. Do you want to see the property 4. Visit property and prepare offer 5. Meet Personal Representative 6. Negotiate deal 7. Obtain funds and complete closing
When They Call I m sorry for your loss Address of home Please tell me about the home = Worth Are there any liens or taxes = How much What is the asking price = Asking Is home empty When would be a good time to show Name and address of PR & Attorney
Step by Step 1. Find contact information 2. Contact the P R 3. Decide if you want to see the property 4. Visit property and prepare offer 5. Meet Personal Representative 6. Negotiate deal 7. Obtain funds and complete closing
Before You Visit the Property Start a file MLS Sheets or Fact Sheets Tax Appraisal Sheets Comps or Appraisals List of Repairs & Cost Estimates Analyzer (Turbo-Bidder) print outs Map
Step by Step 1. Find contact information 2. Contact the PR 3. Decide if you want to see the property 4. Visit property and prepare offer 5. Meet Personal Representative 6. Negotiate deal 7. Obtain funds and complete closing
Meet with Personal Representative View the property and fill out repair form Do they want cash Do they want a stream of income
Walk Through Print TurboBidder2 Blank Form Take a Clip Board The Seller interview is Critical Ask Seller to show you around Cultivate Rapport Estimate repairs at Retail (double) Be on the Seller s side NEVER STATE YOUR PRICE FIRST!!!!
Estimating Repairs Use Turbo Bidder Form $28,347
At Appointment Show the repair cost Negotiate price down Ask How much of equity do you need? What for? Write down the answers
Estimating Rehab 1200 square feet that needs: Roof $2400 New sheetrock $1200 Interior paint $1200 Exterior paint $1200 New kitchen $1200 New bathroom $1200 New carpet $1200 New windows $1200 Total Rehab Costs $10,800 If very dirty--add $ 600 to be safe make it $12,000
Would You Like for Us to Take Care of These for You? Paperwork Insurance Cleanup Property Taxes Accounting Realtor and Fees Fix up Contractors and Sub-Contractors
Determining Values What should you offer for a property? Check the tax value Is the tax value the true value? Get the comps Is this the true value? What is the difference? Complete a financial analysis using TurboBidder2 Complete a file or packet
Information Needed for Offers MLS Sheets or Fact Sheets Tax Appraisal Sheets Comps or Appraisals Sales and Rents List of Repairs & Cost Estimates Analyzer (Turbo-Bidder2) Print-outs Map
Prepare Five Offers Use Deal Cruncher All Terms Cash and Terms All Cash Option Revocable Option Do Research of Costs Car Furniture Move
Structuring Offers Use the TB2 Deal Cruncher Cash 60% or less of FMV Terms 65% at 3% for 30 yrs. Mixture 5k down & 4% 35 yrs. Option 45 days to sell Ask for 90 days to close Make each offer an addendum Addendum A
Before Presenting Cash Offer State that: Your running a business The offer needs to work for you It s not intended to offend Probably lower then expected Review TB2 repairs with them The offer is an option for their consideration But with the advantage of a quick closing A fast--no hassle closing
Cash All Terms Present Offers & Get Commitment Cash and Terms Solve their money problems An Option A Revocable Option Sign Agreement Contract Option
Cover Reasons to Act Now Market conditions are not good Home values may continue to drop This home may not sale for long time Holding costs are very expensive Freedom from all the hassle To put an end to this chapter
Step by Step 1. Find contact information 2. Contact the PR 3. Decide if you want to see the property 4. Visit property and prepare offer 5. Meet Personal Representative 6. Negotiate deal 7. Obtain funds and complete closing
Make Offer Complete offer packet Put figures in Turbo Bidder 2 Fill out Contract Arrange a new meeting Explain your offer price Get agreement to purchase Obtain funds and complete closing
Stir and Repeat
Probate Review Can be a good way to find deals Takes time and effort Dealing people who have lost someone Works well with a good system Key to success is people skills
Easy as 1 2 3 Seeking Wisdom is a Secret to Success!!! To learn more about Probate www.probateleadsus.com
Final Thought If you only take one thing from the training today let it be this... The Probate program is designed to solve the problems for people in distress If handled properly it can be a win for all involved! The best time to start on is TODAY!! So let s get out there and find some Estate Sales!!!
Questions? Contact information: Dennis Henson 6902 Shore Breeze Ct. Arlington Texas 76016 Phone: 817-371-8658 dennisjhenson@yahoo.com Visit www.dennisjhenson.com www.singlefamilyfortunes.com www.turbobidder2.com