Classic Real Estate

Many investors who are new to real estate investing get lulled into the idea of easy money with foreclosure investing. While there is a lot of money to be made with foreclosure investing, there is a dark side to dealing with acquiring the properties; you must deal with a very unwilling and emotional seller. Probate real estate investing is far easier and just as lucrative.

Foreclosure investing and probate property investing may seem exactly alike, but there is a slight difference between the two. They both allow you to buy properties at a discount to current market prices, but one kind of investing is less difficult than the other. This small difference could be the determining factor of your success or failure especially if you are new to real estate investing.

With foreclosure investing it is very probable that you will have to interact with an unpredictable seller. In many cases, these sellers are losing their homes because other finances have gotten out of control. The sellers feel that they are being forced out of the home due to circumstances beyond their control. With a foreclosure, the seller will need to leave the home in order for the investor to help in the best way. The investor will consult with the seller about how to leave their home behind in a way that is least damaging to the seller’s credit. In many cases, by the time a distressed seller allows an investor to help, the situation is so grave that saving the seller’s credit is the best possible scenario.

As you can see, foreclosure investing involves assisting an unwilling and, often times, emotionally charged situation. If you are not a compassionate person, you should consider avoiding foreclosure investing. Even veteran real estate investors shudder at the thought of making a profit at the expense of putting a family out of their home. It’s emotionally draining on both sides.

Probate real estate investing by its nature involves dealing with people who have inherited free and clear properties. They are usually willing to deal with you to get the property sold. Many times, heirs are in need of cash, so these deals can be done quickly since the heir wants their money right away.

It is very fortunate that you are dealing with a person who needs money in a short period of time. They see the probate home as a vault of locked money. In many cases, heirs are settling the affairs of the deceased and are cash strapped. Death taxes can be staggering when it comes to estates that were not set up to minimize death taxes.

In case you did not know it, death taxes must be paid in a fairly short amount of time after the homeowner dies. When death taxes go unpaid, interest and penalties can pile up at a furious pace. Since the heirs do not want to see their inheritance go to service a tax bill, they are very willing to deal with you. They are cash hungry and you can help them.

While it may have seemed that foreclosure investing is the same as probate real estate investing, the two vary greatly when it comes to getting the property as an investment. Foreclosure investing draws you into an emotionally charged environment where the outcome is unpredictable. On the other hand, probate property investing involves picking the best properties from a line of ready and willing sellers and that’s a whole lot easier for a beginner or a long-time investor.