Realty411 Magazine Featuring Lori Greymont | Page 48

Commercial Probate Options, pg. 25
family homes. While there are many
investors that specialize in residential
real estate, there are also ways to profit
in commercial land and buildings.
Residential real estate has some
obvious advantages. There is more
demand for residential homes; and
therefore, it is easier to find properties
that may fit your investing profile.
Investing in a single home is also
more affordable as the price point for
a residential property is generally less
than the investment in a commercial
property. Luba Muzichenko writes,
“Probate sales are ‘as is’ sales, and...
the estate does not have to disclose
anything about the property. Does that
mean you have to make an offer on
the place blindly? Not a chance! You
have every right to fully inspect the
property. Bring a contractor, bring a
friend, bring an architect, bring your
mother! It doesn’t make a difference
who you bring, just be sure to bring
them BEFORE you write your offer.
Also, one thing to keep in mind... with
your offer, you will have to submit a
cashier’s check for 10% of your offer
price, payable to the estate.” 
There are cases where you can have
the property professionally inspected.
Everything depends on the laws of the
state that you are working in, the terms
of the probate and the desires of the
court. As you are learning the probate
business, take the time to find a mentor
who can help you to understand the
process of a probate sale. Part of that
process is the submission of earnest
money. This deposit is traditional in
any real estate transaction and applies
to both residential and commercial
real estate. The amounts in commer-
cial real estate would obviously be
higher due to the increased purchase
price.
While some investors focus on
residential real estate, there are options
in commercial properties as well. In
fact, one of the most profitable areas
in probate is working with commercial
real estate. The researchers at Inc.,
said, “Buying commercial real estate is
a complex undertaking that is difficult
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even for experts to time right to maxi-
mize their investment value, let alone
entrepreneurs or business executives
whose areas of expertise are in different
industries. It’s also a venture rife with
risk, as buyers, sellers, agents, and rent-
ers alike can suffer the consequences of
a dip or spike in demand. At the same
time, for a business, on the upside the
potential rewards can be substantial.”
If you are interested in a “substantial”
reward, as the authors indicate, then
commercial might be for you.
What kind of commercial properties
might you find in a probate? If an indi-
vidual owned a business or was a real
estate investor and held them personally,
then the properties may end up as part
of the estate that is being handled by
the court. These properties may include
everything from apartment buildings to
undeveloped land, strip centers, office
buildings, stores, restaurants, ware-
houses, industrial properties, doctor’s
offices and medical facilities to malls
and hotels. There is a wide variety of
buildings that are considered commer-
cial property with an equally wide range
of pricing. Each of these properties has
advantages to the investor depending on
what your long term goal might be.
One of the best advantages in busi-
ness property is the increased income
potential that is present in commercial
real estate. Matt Larson said, “The best
reason to invest in commercial over res-
idential rentals is the earning potential.
Commercial properties generally have
an annual return off the purchase price
between 6% and 12%, depending on the
area, which is a much higher range than
typically exists for single family home
properties (1% to 4% at best).”
Knowing that there are both residen-
tial and commercial options in pro-
bate real estate investing is one thing.
Finding them is something completely
different.
professional services that are available
that can give you the information you
need in order to pursue properties in
probate. While you could go to the
courthouse yourself and look through
documents to try to identify which
leads are worth pursuing, you can save
yourself a lot of time and frustration
by having a lead service deliver that
information right to your email. These
services are both economical and help-
ful in that they provide information you
might not otherwise find on your own.
• REAL ESTATE AGENTS. You
can work with a real estate agent in
order to find a residential or commer-
cial property. Said Muzichenko, “Most
probate sales end up listed in the Mul-
tiple Listing Service (MLS), but those
that don’t are listed on the BlueSheet,
which can be found at the California
Superior Court in San Francisco. Of
course, if you are a buyer working
with a REALTOR® that knows you
are interested in probate property, your
REALTOR® will do the searching for
you.”
• CONTACT PROFESSIONALS
IN THE FIELD. As your business
develops, you may want to work with
local estate attorneys or accountants.
They would have firsthand knowledge
about properties that may become
available due to a change in family sta-
tus. Building a relationship with them
and offering them a finder’s fee can be
a great way to add to your portfolio .
THE BEST WAYS TO
FOLLOW UP
Once you do find a property that you
are interested in pursuing, the next step
is to follow up. Generally, probate
investors have found that a professional
letter directed to the Executor is a good
way to start the conversation.
There are several critical compo-
nents to your communications with an
Executor. A short introduction of who
you are and why you are contacting
them is a good way to start. Adding
information about what you do and
how you can help them may spark
some interest. Inserting a comment
about how you found their information,
HOW TO FIND OPTIONS
Probate real estate investors have dis-
covered that there are key ways to find
out about residential and commercial
options. Here are a few of the ways:
• USE A LEAD SERVICE. There are
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