A note from Justin: Sharon Vornholt from the Louisville Gals Real Estate Blog is back with part 3 of her series on Probates! Be sure you check out part one and part two also! This time Sharon shares strategies for marketing to probate sellers and how to shift your mindset to take advantage of “the low hanging fruit”! 🙂
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In Part 1 of this series, we dove into understanding the basics of probate investing. In Part 2 we demystified the sometimes confusing terminology of probate investing. So today in Part 3 of this series, let’s get down to the “nitty-gritty” of how you get these leads, and the best way to market to these motivated sellers.
Figuring out this piece of the puzzle and implementing a successful marketing campaign will determine your success with probate investing.
Getting the Leads
This is by far the most frustrating part of the process for many folks. Let me start of by saying that this will determine your success or failure; figuring out how to get the leads. This is also the part of the process that causes most real estate investors to throw in the towel before they really even get started.
Here are some quick statistics.
There are over 3300 counties in the US, and each one of those counties has a different procedure for getting the information that you need when marketing to probates. The actual probate process is also different in every area. It’s important to understand that you will have to do some detective work to figure out the process in the counties where you want to work.
You see; there is no “one place” everyone can download a list for their individual state, and there is no “magic button” for getting the 4 pieces of information you need to work in this niche. It will almost certainly take some work but as I said before, these are some of the most motivated sellers on the planet and here’s why:
They have just inherited a property that in almost every case they don’t want.
These folks just want the cash that is sitting in the property.
And if the house needs a lot of work, the heirs just aren’t going to put their time and money into Aunt Ethel’s outdated, run down property. What this means to probate investors, is that there is a world of opportunity out there. You are looking for those gems that need work; the ones that they won’t bother listing on the MLS and there are a lot of them.
Does this mean that you will never get a “pretty house” as one of your probates? Absolutely not; it just means the most of the really motivated sellers will have a house that needs work.
That is the “Low hanging fruit”.
Where to Start
The first place to start is by calling your local probate court in the county you want to work in. When I did that many years ago, they told me exactly what the procedure was for getting the leads. If you get someone on that call that is “less than helpful”, just call back. Most folks are willing to tell you how you can get those leads.
What are the 4 Crucial Pieces of Information You Need?
There are only 4 pieces of information that you need to work in the niche of probates:
- The name and address of the deceased
- The name and address of the executor or administrator
That’s it. Once you have this information you are good to go.
Where Can You Find the Information?
This is where the detective work comes in.
If you are really lucky they may be published in the newspaper on a regular schedule or they may even be online. In this day and age I am always amazed at how few areas have this information online and even more surprised that they make it downright difficult to get in some areas.
In my city, all the information needed is included in the newspaper listing. However In some areas that even have the probate information online, not all of the information is always included.
For example, I was recently helping one of my students find the information for his city in Texas. We discovered that the listing had the name and address of the executor, but only the name of the deceased. That meant more detective work for my student to try to determine if there was property in the estate.
There are still many areas around the country where you have to go to the courthouse and manually pull files. Don’t let this stop you from working with probates. If this is the case in your area, learn the process, streamline this process of getting the leads and then teach someone else how to do it. This is a perfect task to outsource.
Here is the thing you need to understand; the more difficult it is to get the leads, the less competition there will be in your area. Be a 1%’er; the one that goes the extra mile (or two).
Can You Buy a List?
The short answer is sometimes. There are a several companies where you can purchase leads, but they are expensive. I would look at doing that only as a last resort since these leads are available at no cost in most areas.
Working on Your Mindset
I can’t tell you how many times I have heard this:
I feel weird marketing for leads that involve “dead people”.
My advice to you is that you need to get over it. You just need to change your mindset where this is concerned.
Like I said before, folks in charge of settling these estates have a problem that needs solving — nothing more. They have an unwanted property to sell and in many cases you are their savior. They are so grateful you can take this ugly property off their hands in exchange for a fat check.
What Can I Expect with these Houses?
When you are working with probates and estates, you will often find that the house hasn’t been updated in decades. It’s not unusual to find a house that has new windows and a new furnace and AC (those things have an effect on your utility bills), but it still has the original carpet, kitchen and bathroom(s) from 50 years ago. It’s also pretty common to find really outdated electrical systems. Most of these folks don’t have a bunch of TV’s and computers so these outdated systems work fine for them.
Elderly folks are content to live with things they are familiar with, and aren’t aren’t concerned with cosmetics. The probably actually liked their old knotty pine cabinets and asbestos block tile.
The other thing that is really common is that they are often “keepers”. This can range from folks that have kept everything that has come in the door in the last decade or more. Or it can even be worse and are true hoarders. Always figure cleaning out the house in your offer. I have found this to be the main reason the heirs delay selling the property; they just can’t deal with that final step.
Marketing to Probates
I have very strong opinions when it comes to probates and marketing pieces. I believe that you should only send white professional letters to these folks. They are often grieving and the last thing they want to see is a yellow letter that arrives in the mail which looks like it has been written by a third grader, or a postcard that says “Sorry for your loss”. It’s disrespectful.
I talk with a lot of people in this situation and they don’t like these two mail pieces. So be professional, and be discreet. Always include your business card in your first letter. They may not be ready to sell today, but this is just one way they can keep your information when they are ready to sell.
Two questions I get all the time are, “When should I start marketing to these folks and how long should I mail to them”?
You should start mailing to them as soon as you get the probate leads. Bear in mind that a lot of folks don’t start the probate process for months or even a year after the death. I buy a lot of houses around that one year mark.
You should market to these folks until the house is sold; in other words until you buy the house or someone else buys the house. In today’s market most of the homes will be sold in 12 -15 months so that is about how long the typical probate campaign will last.
How often should you mail to them? You should mail every month; no exceptions;
Probate investing is one of my favorite niches. These sellers have a house they don’t want so they can be some of the most motivated sellers on the planet. If you’re not already working in this very lucrative niche, take some time today to check it out.
How does the process work in your area?
Coming next time – “How to Avoid Probate”