The Probate Hookup

"So, are you guys like Pedro's cousins with all the sweet hookups?"

"Simon."
-Napoleon Dynamite

I have had a few people ask about my probate process. And in the spirit of the sweet hookup I'm going to go into detail...
If you make a ton of cash, you can send my referral fee to my paypal account -heytaylor30@hotmail.com-. Now go make some money!

First off, big thanks to Preston Ely for his probate course. He gave it out as a bonus along with a teleconference put on by flippinghomes.com and it was exactly what I needed at the time. I understand that he is developing a probate specific course & I will link that when it comes out...

Intro:
My first foray into real estate was by knocking doors of people in foreclosure. Foreclosures (FC) are tough. There is a ton of competition, even thousands of other investors trying to get a hold of people in pre-foreclosure(PFC).

People in foreclosure get:

• mail(letters/postcards/post-it notes/fake "while you were out" phone message slips/pens...),
  
• phone calls,
  
• investors calling their neighbors & relatives,
• investors knocking on their doors
  
• investors door-knocking their neighbors (& possibly relatives,)
  
• fake UPS deliveries, (this is a good one - Brilliant!)
  
• business cards jammed into the door & stuffed in the mailbox,
  
• annoying I buy houses signs posted around the corner,
• etc...
  

People in PFC are good at throwing away mail (ergo the pending FC?) and avoiding/denying, so you end up being:

• one of the many investors, that are
  
• trying to contact someone that doesn't want to be contacted and
  
• who is good at avoiding you.
  

An uphill battle for sure... (That doesn't mean that I don't pursue FC's, I just think that it is a tough market to start your RE experience with.)

On the other hand...
Probate heirs are regular people.

• They open their mail.
  
• They will call if they need your service.
  
• They will answer the phone if you call.
  
• They will return phone messages.
  
• They don't get letters from many investors and
  
• They tend to be very, very nice, (even grateful for the contact.)

You don't need to knock on their door, call their neighbors or bombard them with repeat mailings. A one-time mailing is all I send. (I am planning a 6-month follow up letter, but that is still in the works & will be a future topic...) In short, probates are an easy way to get your feet wet in real estate & get comfortable talking to sellers. And a great way to get/keep the phone ringing as you expand into other marketing/seller avenues.

Probate: A Primer
Probate is the process of settling financial affairs when someone passes away. It is a judicial process handled by the courts and the files are public information. People can use living trusts to avoid probate and keep their financial information private, but most don't and the estate ends up going through the probate office. Many people actually die intestate and the courts have to decide who gets what... messy stuff. (Come to think of it, I need to get a will going... So do you, right?)

The Courthouse: It All Starts Here
My most recent job was pretty flexible and it allowed me to go to the courthouse and collect my probate info each week on my own. The Monday after my flippinghomes.com probate teleconference I beat a path to the courthouse to try out my new skills. Being the MBA-spreadsheet building knucklehead that I am, I tried out a ton of different ways of collecting and processing the info (designing different info collection sheets, tracking the files by hand and then via excel spreadsheet, mail-merge tweaking, etc...) until I had it down to a pretty efficient system.

One of the barriers to entry in probates is the fact that the info you need is only in the file.

• Obituaries are published in the paper,
• some counties have basic info online,
  
• but the list of heirs and whether or not the estate has property is only in the file. Someone has to open it and get the info.
• This actually keeps competition low.
  

Many (dare I say most?) RE investors are lazy, buying into the 'work from home in your underwear' mantra. (by the way, what is so great about working from home in your underwear? PUT ON SOME PANTS!! Again, I digress..)

My first trip to the courthouse I was a little unsure of what to expect. There is no reason to worry. As it turned out, I had no competition in my county! None! The ladies in the probate office were very nice and said that there used to be a couple of people that would come into the office to pull files, but they didn't come around anymore. In the 3 months that I collected my own probates I only ran into another person collecting info; one time, one person. It turned out that she was forwarding the info to a guy that runs estate auctions out of Florida. No competition for the real estate.

Since my aim (and yours too) should be to get 3 counties going at a time, once you get the procedure for your own county, it is likely that you'll find similar in adjacent counties as well. Do your best to systemize the process so you can get others gathering the info for you. Make it easy for them and they'll keep working for you for a long time. (Who doesn't love an easy job?)

The Probate office in my county is at the courthouse and is staffed with 2 very nice ladies. The files are numbered (2007-xxx) and start at 1 at the beginning of each year.
I was only looking for files that have property in the estate, so I asked one of the girls if there were any easy ways to do a quick check for real property in the file.

It turns out that there is a $1 transfer tax charged if there is real estate transferring in the estate. No tax, no real estate. They also note the amount of the property in the column next to the fee on the opening page. So all I need to do is flip open the file, scan the first page for the transfer tax, check the amount of property and then start filling out one of my info sheets. Easy, peesy, Japanesey...

**Look/ask for shortcuts like this. A couple of Starbucks gift-cards go a long way.

The File:
The file contains the decedent's will and any addendums. Initially I would read through the wills to see if the property was listed specifically and see who the heirs for the property were.

• A note about reading the will: I thought it would be a little creepy to read someone else's will, but most times it was quite touching to read the comments in the will. You can tell how much people care about leaving a legacy and helping out the heirs. It is a surprisingly emotional thing and not impersonal as you might think.
  

It didn't take me long to realize that I didn't need to read the will. All I needed was the info of:

• Whether or not there was RE in the estate
• The names/addresses of heirs
• Name/address of the attorney (if there was one.)
  
• The date of death (so as to not send my letter too soon.)
  

The reason you don't need to read the will is that the county requires that all heirs be contacted/notified so that they have a chance to make any claims against the estate. The list of heirs includes the assigned executor (with phone #) as well as the mailing addresses for all heirs concerned. Occasionally the estate will use an attorney & my form includes a spot to collect that info as well. I also have a letter that I send to attorneys. No responses yet... but I still send the letter.

The File Part II: Schedule of Assets:
One thing I learned is that within 4 months after the decedent passes away, the estate executor is required to file a schedule of assets with the court. They have to list the bank account and retirement account balances, cars, other items of value including real estate. So in the beginning I started going through files that were at least 4 months old so I would have the specific address of any real estate and the amount that the executor assigned to the property.

It turned out that this was just extra information and by waiting to contact the heirs after 4 months I missed out on a number of chances to buy property. Good info if you happen to get it, but not vital.

I got a call from one of the executors thanking me for mailing my letter, but he had just signed the documents with another investor & sold the house. He actually said "too bad I didn't get your letter sooner, he got a really good deal on the house..." I hung up the phone and thought, "CRAP!!! What an idiot I am!"

• The only thing that matters is that the letter gets in the hands of the decision maker when they have decided to sell. Sooner is better. Don't wait for info about the address or value of the property. If they want to sell, they'll call & tell you about it.
  

Lesson learned. I changed my approach. Instead of collecting the info months after the fact, I started collecting info from the prior 4 weeks. The file notes the date of death, and I didn't want to mail too soon after the passing, so I decided on 4weeks. Figure out what you're comfortable with and mail as soon as you like.

The Letter:
I encourage you to write your own letter. I think that one of the keys to working with probates is your philosophy of helpfulness and being genuine.

You will want to have some key components in your letter:

• Address the heir,
  
• express condolences on the loss of their loved one (I insert the name of the decedent - totally your choice)
  
• Then you will need to address the fact that you understand that there was property in the estate and you're interested in buying it if they want to sell.
  
• Note some of the challenges of trying to sell real estate (cleaning up the property, expenses of taxes & upkeep, expenses of real estate commissions etc).
  
• Don't forget to encourage them to hold onto your letter in case they decide to sell in the future and
  
• wrap it all up with a nice, heart-felt best wishes of sign-off.
• Sign the letter in colored ink to make it stand out from the black printed letter.
  

My initial letter included the address of the property listed in the probate file. I thought it might be better received if I showed the executor that I had done my homework. I learned through a few conversations with heirs that when someone owns property in an estate, they often own multiple properties and likely in different city/counties... **So my idea of having a specific address in the letter actually limited my potential responses from heirs.** Whoops.

I got a couple of calls that went like this... "I have your letter here and 123 Elm St. wasn't my mom's house, but we do have her house in "random city" that we are thinking about selling. Would you be interested in that?" Holdonaminuteletmethinkaboutit, YES!

Lesson learned. I have modified my letter and have removed any specifics about location of any property. It mainly says, "I understand that there was property in the estate and if you are interested in selling I would be interested in discussing it with you..."

The number of response calls has gone up and as an example, I even had a guy with a property in FL ask me if I was interested in it. (I referred it to an online associate of mine "Tampa Steph"whom I also met online at flippinghomes.com.) And if it goes anywhere I'm getting a referral $$. Nice.

Be Flexible & Look to Remove Bottlenecks (Including Yourself)
At this point, things were going along fine. I was going to the probate office twice a week to gather the probates on my lunch-hour and then entering the info into my spreadsheet in the evening. Once a week I would mail-merge the list and sign/fold/stuff/stamp/mail the letters.

Like clockwork, the phone would start ringing a few days later and I would talk to the heirs. Cool. Met some nice people and looked at a bunch of houses. So far so good.

Then came the layoff. And the new job. 8:30-5, M-F. At the office. Probate office hours... 8:30-4:30 M-F. The courthouse was across town, 20 min drive...

I couldn't collect my own info anymore. I contemplated placing an ad on craigslist for a real-estate researcher, but I didn't have the $ to pay anyone. Quandary... It turned out that I was the bottleneck. I am the limiting factor and when I couldn't get the info, my little venture came to a screeching halt.

The Solution: Coop-a-tition:
I was discussing this situation with a fellow member of TRIG who is also a Realtor. She was interested in getting the list of probates to mail for possible listings. Since I only mail once and then basically never use the list again I suggested that we split the cost of a researcher and share the info.

She did one better and offered to gather the info for me if I would train her on the process and share the names with her.
We worked out a deal where she goes to the probate office once a week and collects the recent probates and then leaves the info sheets for me at the front desk at her real estate office.
I grab the envelope on my way home from work and enter the info in excel.
I print my letters and my lovely bride stuffs the envelopes.
The letters do their thing for a month and then I email the spreadsheet to my Realtor connection for her to do her mailing.
She is competition, but I like to think of it as coop-a-tition. (phrase from JP Moses, flippinghomes.com) which is a mash-up of cooperation and competition. We compete and yet we work together. Can't we all get along? As it turns out, Yes...

Now Go Do It
The point is, you can get this thing going for free (other than some sweat equity on your part if you insist on pulling the files yourself or entering the info & stuffing envelopes.) If you feel like you have to do it yourself first (you don't,) take a few hours on an afternoon and go by the probate office in your county.
Get the low-down on the process, look at some files, get some info sheets filled out and get your brain around the process. Find someone to do the work and get it going man! You can do this!

I'd love to hear what you think & if you have any suggestions. Leave a comment.

Much love.
-Taylor

Motivation and A Low Information Diet

I went to my local REIA last Tuesday night. It was a very uplifting meeting and I had the chance to meet a number of other new investors and some money people (lenders mostly.)

I also learned about a new association here in VA called the Foreclosure Prevention Council. The idea is to provide investor training and encourage ethical FC investing in VA in a effort to become something of a self-governing group rather than having legislation forced upon the industry. I like the idea and plan on attending the initial meeting next week. Here's the link. I'll let you know...

The main platform speaker last night was Tony Horner. Tony was a former railroad worker who has really grown into one of the more successful RE investors in the area. It was really inspiring for me to see a guy with so little formal education and coming from such a humble background make it in the RE game. I really enjoyed his talk and appreciate how approachable he was.

I also met Lonnie Scruggs who is a 30 yr RE veteran who gives speeches at RE conventions across the country. We had a chance to chat about the industry and the value of the connections made when attending local and national group meetings. Lonnie is a mobile home investor guy, which is not my thing, but I appreciate where he's coming from. Can't knock his success, that's for sure.

I've been reading up on how to network with attorneys and am putting together my unique value proposition. I am going to contact estate and probate attorneys in the area in conjunction with my probate mailing program and see if I can get some contracts going that way.

One of the things that has come up in conversation with various people is the question of how I find time to do all the things I have going.
First answer is that I am committed to creating the life I've always wanted and will do what it takes to get there. (And I tend to be a little bit of an insomniac when big projects/things are on the line.)
The second is an idea for creating useful time that I got from reading Timothy Ferriss' book 'The Four Hour Workweek' called a media fast. He actually has a section of the book dedicated to developing a low information diet. The concept changed my whole approach to info/news. Basically, you skip the local/national news for 21 days and use the time/energy to forward your projects.

I have been doing it for the last 4 weeks now and have to report that my mood is better and I have a lot more time to work on my RE project. I totally abstained from all news for 21 days, but am now back to scanning the WS Journal in the morning for Insurance and RE related news. Try it, you'll like it!

Endless Optimism... With a Little Pharma Help

I love this stuff...

The Humor, not the Juice.

Good times.

A Tale of How This Real Estate Biz Got Started

Ok, now that we're past the formalities of me getting some of my creative muse out, let's talk Turkey... Real Estate turkey.

After I read Rich Dad, Poor Dad in 1998 I knew that I would eventually get into the real estate business. A number of the insurance guys I knew were also real estate investors and it seemed like a good fit to mix both avenues to make money & keep things interesting.

In 2006 I moved to VA from CA after finishing my MBA. I thought my job was cool and liked the area (12 mins from from the beach!) But within 3 months the regional officer got laid off, I thought that there would never be a better time to get something on the back burner. I looked at teaching part-time for the local Jr College, but my schedule for work involved so much overnight travel that I couldn't make the commitment. So I started combing the internet for real estate investing & flipping homes ( and watching every home flipper show on cable that I could get.) I stumbled upon the chat board at the best website for real estate investors, www.flippinghomes.com and was able to learn and make acquaintances without spending tons of money on courses. I read and listened to audio downloads and filled my drive time with Real Estate education.

In Jan 2007, my direct supervisor got laid off and I had another shiver go through me and knew somewhere inside that my time with the company was limited. (I had no idea how limited...)

I knew that one of the agents in my territory was an active investor and we struck up something of a partnership with me knocking doors on the foreclosure leads that he was mailing every week.

I knocked doors for about 3 months in the evening after work and was able to help a good number of people, but we didn't end up buying any properties. There were just too many people that were right up against the loan to value on their homes...

I eventually decided to quit door-knocking and decided to join my mentor in the direct mail business. I/we mailed to foreclosures in the area and had a decent number of responses, but again it seemed that the 'up to my neck in debt/no equity' deals were the only people calling us. I tried phoning forclosures, but calling people that didn't want to be called was worse than trying to find people that didn't want to be found. I was searching for something else - my real estate 'thing.'

I listened to one of flippinghomes.com's saturday workshops on probates and decided to add probates (inherited property) to my list of mailings and saw the number of response calls go way up. And, as foreclosure responses tailed off, my probates continued to respond at about the same rate... ergo- drop the FC, keep the probate.

Late summer '07 I got laid off as the company merged the VA & Mid-Atlantic territories and I became redundant. I was encouraged to 'return to the field' (sales,) which is corporate speak for 'get out.' I found a job pretty quickly, but continued to work on my little real estate investing machine in the evenings and weekends.

That's where I'm at today. I have partnered with a local friend of mine that is a Realtor who goes to the probate office each week and collects the new probates (for free!). I enter the info into a spreadsheet and mail my letters. After 30 days I send her the list of names and she can mail to them as often as she likes at that point. It's a great little partnership since my new job isn't as flexible and I can't get to the probate office myself.

I mailed 90 probates last week and have another 30 going out this week. I generally get 5-6 calls per hundred letters and I have one offer out there (not returning my calls,) which is likely a dead deal...

I'm working on a business plan and adding more to the business, but need to get some of the kinks worked out of my organization and call tracking system. I'm using a paper system right now (post-it notes & 4x6 cards) and it's failing me. In order to grow, I'll need to replace that with something more predictable. I'm looking online for some free resources and also have some software that I have used in insurance for tracking clients/prospects that would work well too. I'm open to suggestions...

Stay Hungry, Stay Foolish

I had a strange premonition today that I am on the eve of something big. I'm putting it down here to make it permanent and we can all see in the future what the feeling was all about, but it was a really cool de ja vu kind of thing. I was at the courthouse gathering info for another of my probate mailings and had the feeling. We'll see what it was all about, but it was cool. Hopefully you've felt it before too.

When I got back to the office I checked my email and got a blog-link of Steve Jobs' Commencement speech at Stanford 2005 titled 'Stay Hungry, Stay Foolish'. I found it surprisingly soothing that someone so ridiculously successful had something of a rocky beginning. It's a great vid clip and you can click here to watch it by clicking above. For the entire transcript etc, check out the link on my blog in the links/blogs section.

Between my RE connection and myself, we were able to get 26 new probate records and when added to the 10 that I have from last week, I am looking at over 100 more letters to go out tomorrow. I also sent out 18 attorney letters this morning and 90 or so probate letters on Tuesday.

If my numbers hold true, my phone should start ringing around Friday this week and I should get 8-9 interested calls.

I'm also thinking about getting back into pre-foreclosures by door-knocking since it is dark in the evening again. We'll go over that in another post.

Learning & Earning!
Taylor out

Cold Cereal is my Comfort Food

My delightful wife and the boys were all down and I couldn't sleep.

You've been there too I'm sure. Money, job and dreams (ie. real estate plans) were all rolling through my head & I had too much nervous energy to even lay down.

Raisin Bran Crunch to the rescue! Ahhh...

It is kind of healthy what with all the bran and raisins and all, but it is more about the crunch and the endorphin push of eating my favorite comfort food. Honey nut Cheerios is also a favorite (lowers cholesterol, no?), but since the baby doesn't like them I have no excuse to keep them in stock in the pantry. I actually stay away from the sweet cereals as they seem to incite nightmares once I head off to bed. No, it's healthy mid-night eatin' at it's finest.

A bowl of cereal, the remote and a couple of episodes of Property Ladder or Flip That House and I'll be ready to drift off to nighty night land.

Oh, you have to check out the show Flipping Out on Bravo. It's Awesome TV. The gays, quirky assistants (with rankings for assistant #1, 2, 3), and Jeff, the nutty property investor. Love that show. Forget Survivor or The Simple Life, this is my kind of reality TV.



So, a virtual spoon clank salute to you my cereal insomniacs! I'll be working on probate mailers for the next couple of nights so look for updates on how that goes...

Cheers!
Taylor out.

It's All Scripted

I'm focussed on scripts today.

Real estate speaker and NLP disciple Bill Twyford came to our REIA group meeting last month and my head has been spinning ever since. I didn't pay the $900 for his CD's/workbooks/Boot Camp, but there was something he said that got me thinking that I haven't been able to shake...

His whole premise is that we all use scripts in all of our communication; from our dialog with the kids to conversations with customers at work. We all use various combinations of scripts that have either worked well for us in the past or that we use, but don't realize how they impact the people we talk with.

I have spent the last 3 weeks taking time to focus on my own scripts while phoning for prospects at work or herding the kids off to bath and bed and I was surprised that I use the same script at nearly the same time of day (in the case of putting the kids in the tub)! I was stunned!

The second part of Bill's premise is if we are hoping to develop the skills necessary to discuss real estate with sellers & potential buyers, we should take the time to craft what it is that we want to say and practice like a true professional would. You're a professional - act like it. Stop practicing during the game!

Up to this point, my thought was that when someone called in response to a mailer or leave-behind I would use each call to 'get better each time.' That was actually part of my business plan, to get better as I went along... Seems ridiculous now that I think about it. While I knew the value of learning a script when prospecting for insurance, I somehow missed the connection between what I'm trying to do with real estate and my prior learning. Duh.

So I have spent considerable time/effort searching my resources for little bits and phrases that I want to use to develop into my very own script and then memorize it. That way I will be able to at least start each conversation the way I want to and should have the right stuff to bring back any wandering conversation. That way, when I am discussing someone's foreclosure situation, I'll be paying attention to what they are saying rather than trying to think of what my best thing to say should be.

It really is an interesting idea that I am looking at in all areas of my life. I've started asking myself the question "where did I pick up that little bit of script from?" when I find myself speaking on autopilot. You should try it.

I think it was W. Shakespeare that is credited with the whole 'all the world's a stage, and we are but merely players...' thing.

Seems to me that he was on to something...