Steps for probate wholesaling? Just sent out 60 letters

20 Replies

Please correct, add to or demolish these. Just from what I have gathered so far. Steps:

-Contact leads

-Get information on house & see it

-Agree on price

-Get under contract

-Set up the close

(Title & Buyer stuff, not sure when)

As title mentions, just sent out 60 letters. My county's records are all online and the counties around me. Someone who does this said 20/week was a good amount. 

Do you also call the fiduciary or just mail them? all of their numbers are also listed.

Updated almost 3 years ago

Edit: Found good threads on calling vs letters. Still curious on the steps though

There is so much more!!!

Im not the pro on probate because its not one of my niches; but i attendted a seminar held by PAUL HORN here in the LA COUNTY. 
its a great niche but like everything has its own process. Make sure you are educated in the probate process.

Things that are extremely important is whether the personal representative was deemed full authority or limited authority. Full authority allows the timeline of the house to be sold within the first 2 months of the probate process (beneficiaries/heirs get paid out at the end of the process). Limited authority required a probate referee to actually appraise the property which can interfere with getting the house at a discount and at the same time stretches out the process.

If you dont know these terms than you have some research to do!

Your going to want to handle these leads with care due to the circumstances of a lost one. There is so much terminology that i know im missing, but my best recommendation to you is study the probate law in your own county like the back of your hand. Its different from state to state; but understanding the process will allow you not only to provide value to your seller but allow a much smoother transaction of the sale of the property. 

I would recommend listening to  @Sharon Vornholt podcast  and check out her mailing campaign on probate (shes the probate queen). 

hope this helps!

Hi @Jonathan Messri - I love working with probates. And yes, the process differs from state to state, and each one of the 3300+ counties has a little different process.  You can Google the process for your state.  It's actually pretty easy to do.

The thing to focus on is that these folks have a problem; they have a house that they must sell (in most cases) before the estate can be closed.  You are a problem solver that just happens to involve real estate. That's the business you are in. The problem solving business.

If you work probates with that mindset, you will do great.  There is a lot of info here on BP and also on my blog.  Just learn all you can.  Best of luck.

Sharon

Hi! Another tip we recommend at US Probate Leads is to expect to reach out to the heir/executor multiple times over about a year. Sometimes heirs/executors want to sell quickly and others, they are not ready for a while so you want to keep reaching out until the time is right for them. Also, don't forget about historical leads. Unlike other leads, sometimes leads that are 6 months old in probates are the best. We have a lot of great information at www.usprobateleads.com. As others said, you want to do your research and maybe take a webinar or online training to make sure you really know all about probates. Good luck!

Just met with two leads today. They both appear motivated. So far I have

> sent out leads

> researched the property

> met with the executors (both homes owned free & clear)

Now:

when do we sign the purchase contract with the agreed-upon amount (at the initial meet or wait a week & hear back from investors?)

what do we do after getting the contract signed? (send paperwork to the title office & talk to them about closing?)

Essentially I am asking, step by step, what to do. The first three steps I have basically. I am chomping at the bit now because I believe I have two very motivated sellers. One's heirs live out of states & the other just wants to offload it. 

@Marcus L Roberson

Are you asking about an "assignment fee?" Why are you wanting to double close? Will you require transactional funding?  Are you aware of the costs?  

Need to know more about the situations before your question can be completely answered.

Sorry for providing so little details. 

In Ohio

Met with executor who is also an attorney. Heirs are out of state, just want to offload itt

Decedent died on 5-23-18. Was filed with Court 6-1-18

ARV is between 270-290k. Needs 45-50k in updates.

I am looking to assign for a fee (hoping 20k?) (also may have to double close to stay legal since I do not have my RE license)

But I was wondering if I should have got it under contract the day we met at the house and then tried to find a buyer

Also I do believe I would require transactional funding

Also I believe I may need to ask for earnest money from buyer to pay for closing costs for seller since it is transactional but I could be wrong. My thing there is I don't want to show up & have buyer present & not have the deal go through because I was supposed to have 2-3k in cash for closing costs for either buyer or seller. No idea how that works even though I have done a ton of research.

Update: For anyone else interested.

Three investors have contacted me about this one property and I probably should have got it under contract when FIRST seeing the home because now investors are questioning me, wondering why I don't have that yet. 

So bottom line. Know your numbers BEFOREHAND, do some quick math at the showing & see if you can get it under contract RIGHT THEN AND THERE.

Growing pains yall. Best of luck to everyone else out there wholesaling. I hope we make it. 

Originally posted by @Jose Castillo :

How many probate leads do you mail per deal closed?

 Me, I usually mail when the probate has been filed and published in a local adjudicated paper. Closing a deal will come later. Each file is different as no two files are alike.

Badass of you getting out there and taking action. Nice. 

You want to get the seller under contract (i include something like "15 day inspection period - buyer has a right to walk away and keep emd for any reason .. in case something comes up or you can't find a buyer) and then use that time to find a buyer and put down any emd, then assign the contract to the buyer for the amount you advertised and you essentially keep the difference of the original contract price you got vs the new purchase price you advertised (has to be a good deal still of course)

Out of curiosity, have you made an offer on the property? I'm figuring it would be an offer of about $120K. ($270K x 70%) - $50K repairs - $20K assignment = $119K.

Originally posted by @Jose Castillo :

How many probate leads do you mail per deal closed?

 Havent closed any yet. I mailed 80, got three calls, one said she went with someone else, another went with another investor before i could offer, and the third decided to just put it on the market. Mailed out some more last week. 

Originally posted by @Alexander Schwartz :

Badass of you getting out there and taking action. Nice. 

You want to get the seller under contract (i include something like "15 day inspection period - buyer has a right to walk away and keep emd for any reason .. in case something comes up or you can't find a buyer) and then use that time to find a buyer and put down any emd, then assign the contract to the buyer for the amount you advertised and you essentially keep the difference of the original contract price you got vs the new purchase price you advertised (has to be a good deal still of course)

Thanks a ton man I was starting to wonder if I was crazy, doing all this to get a deal. thank you very much for your info I will put it in to practice. I just want a better life & to able to be very generous someday

Originally posted by @David Stewart :

Out of curiosity, have you made an offer on the property? I'm figuring it would be an offer of about $120K. ($270K x 70%) - $50K repairs - $20K assignment = $119K.

 I offered 137k. The math I did was 

  • ARV * (1 - IROI) - your markup - repairs
  • 270,000 x .75 - 20,000 - 45,000 = 137,500

right? wrong? hows it look? 

looking back I think I was low on ARV by 10-20k.

edit: maybe I should have used .3 instead of .25 also?

In your math, the .75 x ARV sticks out to me as unusual. If you figure selling costs to the investor who buys it from you at 10%, that 25% leaves only 15% of ARV for the profit and carrying costs (including any interest on a loan the investor might take out). The classic MAO (maximum allowable offer) formula (here on BiggerPockets calculators, e.g.) uses 30%.