A homeowner called me and said she wanted to sell her home because they were behind on payments. She had tried to sell the property, but there was a problem with title. The property was titled to two people. The lady who owned the property had bought the property with her boyfriend, and he had passed away five years go.
The property had to go through probate in order for the sale to take place. I offered to pay for the probate, and the lady agreed. But I told her that the heirs may want to sell the property through a Realtor, and in that case, I would not be able to purchase the property at the price we had agreed.
Once the two heirs found out, they did exactly that. They told me that they would get their own lawyer to do the probate. I thought that the deal was lost, but I called them about two months into the process. I sent them pictures and an estimate of what it would cost them to fix the property to sell at the retail price, which was about $55,000 if they got a general contractor.
After they got the bill of $3,500 for the probate from their attorney, they changed their mind and told me that they would sell it to me for the cash offer I made. My cash offer was at 45% of market value. My offer was based on what is happening here in South Florida. The prices have dropped in some areas as much as 20%.
The area where the house is located had comparable sales of $220,000 to $240,000. I had the property under contract for $90,000, and I sold the property through an assignment at $115,000 and made $25,000.
It took about three months for the probate case to be finalized including the approval from a judge. My total investment was $10–my deposit, which I got back when we closed. The homeowner owed $55,000, so they split $40,000 minus their closing costs.
I made more money because they saw how much they would have to invest to sell this property, and I was the only buyer willing to help them with this property that needed a lot of work. Everyone was happy. And they say that you can’t make money in a buyer’s market…
Good luck investing!