Question: Are Probates Still a Viable Source for Deals? Answer…

friendsHowdy, folks, today we are going to dive in and answer a terrific question from one of our fellow Insiders. Dane asked:

“I’ve been interested in getting into probate deals and have seen a lot of gurus come and go. Are you still operating your business and is it still a business that I can navigate successfully?”

jpJP’s Take

Well, when you say ‘am I still operating’ or ‘are we still operating our businesses,’ I assume you don’t mean our real estate businesses in general. But, the question I think you’re probably asking is: “Are we still doing probate?”

And, it just so happens, that I just relaunched my probate marketing again.

Probate is definitely viable. There are more people marketing to probate than there used to be, so there is more competition. It’s no longer virtual territory in most places. But, that should not dissuade you. Competition should never dissuade you.

It’s always great if you can find a way to market for deals that few people have uncovered. But that’s not the litmus test for where you should be. If there’s a lot of competition, it’s because there ARE deals to be had. And I’ll tell you what almost everybody out there you’d be competing against is not doing… and that is sending more than one letter.

It’s been proven over and over again that the money is in the follow up more than anything in direct mail. It has been proven systematically that 80% of the people who will respond to your letter do so on or after the 5th piece of mail has been received… #5! Crazy, huh? But, statistics don’t lie.

Now, in my early years, did I do deals only ever sending one letter to anybody? Yes, of course I did. But who knows how much money I left on the table? So when we are doing probate – the right way – we’re sending a 6-letter campaign.

In other words, every lead gets six letters.

Yes, it can get expensive, but that’s where the money is being made too. Look, when people get that first letter, it’s so often that the stars just aren’t aligned yet…

They’re just not motivated enough with Grandma’s house, or they just don’t have enough of the details worked out yet with the probate or the attorney told them they can’t sell anything yet until they have stuff figured out. Or, it’s possible they haven’t been able to come up with the phone number for the third heir of the property who doesn’t even know that Grandma passed away yet.

There is just no telling with probates.

letterWhatever it is, a lot of times they get that first letter and they’re just not ready to play ball yet. But, when they are ready to play ball (and they may have gotten a letter from your competition but they’ve gotten five or six from you), who are they going to call? Nope, not Ghostbusters, I can tell you that (I know, I’m so cheesy it hurts sometimesL).

So that’s it – 6 letters – that’s the thing I’d suggest that you do to set yourself apart from your competition if you’re worried about it.

Okay, I’m unleashing the Patrick on you now…

patrickPatrick’s Perspective

All good stuff there, buddy, and I totally agree with JP. I use a lot of the deal-finding strategies that so many people use, like searching through the MLS, expired listings in REOs and HUDs and going to auctions and foreclosures. And there are so many people who just will dabble here and there, and the competition is really fierce.

Going into probate, there’s probably going to be a few others in your area who are also mailing to these people. But fewer folks actually go through the process of getting a really good target list. They just get the list that’s easiest to get their hands on.

So, I think it’s definitely worth the extra effort to get your hands on more legit information. My preference is targeting properties after the probate process. I get a quitclaim list after a property has already gone through probate and the inherited quitclaim deed is filed.

A lot of times, these properties are free and clear and have a lot of equity. This has been my preference to focus on because they’re already done with the probate process – if it is an inherited situation. Then I can go ahead and immediately move on the deal.

jpJP’s Second Take

Yes, I would agree with that, Patrick. I want to give one more word of advice here about the probate process and this is because of the part of our original question where Dane asked:

“Is this still a business I can navigate successfully?”

Yes, definitely. I mean, people are always going to die and they’re always going to find themselves in circumstances where their state needs to liquidate the property. So, that’s not going to change no matter what the market is doing, period. Unless, of course, we somehow discover immortality, so let’s all hold our breath for that… not!

I digress…

It’s true that probate is not the fastest way to generate a deal. It’s slow and steady wins the race. It’s methodical and it is a cash cow, but it usually takes a few months for that cash cow to start producing milk. But, it’s utterly worth it. Zing!

So, I don’t typically advise it as the place to start for newer investors for that reason. There’s lower-hanging fruit than mailing to probates. There’s the 10-hour wholesaling model of co-wholesaling that would probably put money in your pocket a lot faster.

But, that’s not to say you should or shouldn’t do it. I’m just telling you where I think it fits into the hierarchy for newer investors. I’m kind of assuming based on some of your questioning that that’s where you are. And, best of luck to ya as you pursue REI!

Insider Minds Want To Know

Anyone out there bringing in the money when it comes to probate? Do tell!

2 Responses to “Question: Are Probates Still a Viable Source for Deals? Answer…”

  1. M Rodriguez Reply

    Hey Patrick. That was a great recommendation on the quitclaim list. How do you go about getting those leads? Is it all courthouse or do you have a recommended resource for those?

    • Charity Akers-Greathouse Reply

      When you are searching online, do a document search for your county. You should be able to find them that way. If not, you may have to go to the courthouse in person. Hope this helps!

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