Probate Investing: The Basics and Tips for Success
I'm not really sure why, but probate investing remains a bit mystery for so many real estate investors.
Maybe it is that fact that these properties become available because someone has passed away.
While this is a sad time for folks, it is also a time when those left behind have to “take care of business”. They have the business of settling the estate to attend to. That may include selling the property, and it almost always involves disposing of the deceased’s personal belongings.
There is Just So Much “Stuff”….
I have learned both from personal experience and from working with a whole lot of folks in the middle of this process, that it can be a gut wrenching job especially if the deceased was someone really close to you.
There are a whole lot of personal belongings in almost every case, and it becomes the job of the executor or PR to decide how best to dispose of them. To an outsider, it is just “stuff”.
But, to the family member entrusted with this job, they are very much aware of the fact that these items were important to their loved one. These items were an integral part of their life.
The #1 Reason the House Hasn’t Been Sold
In most of the probate deals I have done, the number one reason they haven’t sold the property is the final bit of personal belongings that are still left in the house. They just can’t finish the job. If you can take over this task for them, you just may have sealed the deal.
Just remember this: It’s not just about the money.
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There is always “something else” that folks need to make any deal work.
With probates, it’s cleaning out the house almost 100% of the time. I include finishing this process in every one of my contracts. Am I going to be the one doing the job? No. I am a wholesaler. But when I am figuring the repair costs for my end buyer who is usually a rehabber, I will need to include these costs in my figures.
The #1 Reason Real Estate Investors Can’t Get Started Marketing to Probates
Once they have a list, many investors just can’t figure out what to say in their letter. What I have found is that often times they will just send a generic “We Buy Houses” post card rather than to take the time to craft a letter.
I use postcards successfully in many niches, and I actually prefer them in some cases. But for probates, I just think postcards are not the right mail piece.
Stop and think about it for a minute; if someone close to you had just passed away, would you really want to get a “We Buy Houses” postcard next week? I hear a lot of complaints from the people I meet with. They just don’t like getting postcards in this instance. They feel like the people sending them are disrespectful and insensitive.
The #1 Mail Piece for Probates
I have been working in the niche of probates since around 2007. I have tried several different mail pieces, and white letters perform the best for me time and time again. They are personalized, computer generated, professional looking letters. I also have someone that hand addresses them for me.
Here’s a tip for busy real estate professionals. You can get a college student or stay at home mom to fold, stuff and hand address these for about $10-$12 a hundred. The gal that does mine is a college student getting her MBA. She will just kick back, pop in a movie and get to work.
The #1 Question About the Mail Piece
The number one question that I get about the mail piece is whether or not to mention the fact that someone has died. Or in other words, should there be condolences or no condolences?
I think that is just a matter of personal preference. Your letter should be a reflection of what you believe and how feel about the situation. You can be sure of one thing: It will come up when they pick up the phone to call you.
They will ask how you happened to contact them. So I guess the real question is, “When do you feel most comfortable addressing the issue”?
My #1 Tip – Just Get Started
Probate investing is a great niche to work in. By and large, these folks don’t want the house. They just want the cash that is sitting in the house. I have found them to be among the most motivated sellers of all.