Ever wondered how to buy discounted real estate that people left behind in their estates?
Deni chats with probate real estate investing expert Sharon Vornholt on exactly how to score cheap properties.
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Deni: Welcome to our podcast and Facebook Live. Happy New Year, everyone, it’s twenty twenty-two. I’m somewhat glad at 2021 is out. Last week, Brian and I discussed three New Year’s resolutions for a wealthier 2022 and I am excited today to be investing expert Sharon Valdemar, Bournemouth born quotes about probate investing. I knew I was going to get it right. Eventually, Sharon began investing in real estate in nineteen ninety-eight. We were just discussing that earlier and she focuses. She focused that on rehabbing and rentals. And then we had the lovely real estate crash of two thousand eight, and then she became an accidental wholesaler. So, she’s got some experience and a little bit of everything. She’s a digital marketer, a blogger and now a podcaster, and she also has created a course on investing probate investing. And I don’t know too much about this, so I’m excited about this show because I’m going to learn two and I always like to learn. So welcome, Sharon.
Sharon: Well, thanks for having me.
Deni: Oh, I’m so excited that you came along. And so, I have to tell you, I’m a little ignorant on the subject, so tell us a little bit, you know, like what it is.
Sharon: Well, probate is a legal process, and so when someone passes away. Generally speaking, if they have not done estate planning where the properties are in trust and they escape the whole process, the government’s going to want their cut of anything, you know. So, there’s a probate process and it kind of goes like this. People are put off by probate because they think it’s complicated and you need to be an attorney, which you don’t, by the way, I always say that’s why God made attorneys so they could take care of all the attorneys stuff, but someone passes away and then at some point in time, maybe a few months, maybe longer, the family will have to open the probate so they open the estate. And when they do that, they’re raising their hand and saying, we’re ready to sell any property in the estate. As I said, it might have been two months, it might have been eight or 10 months. It depends on when they get ready, but the straight-line process is someone passes away, the probate is opened and then if there’s a will that would be an executor name, maybe they would name Sharon is going to be the executor and take care of the estate in the absence of a will. What’s going to happen is a judge is going to appoint the next logical person. Maybe it’s a child, you know, or there’s a hierarchy, I would say, of who gets appointed. So, they’re going to appoint someone to be in charge of disposing of the, you know, selling the assets and doing all the business of the estate. And that person is what I like to call the decision-maker. And this is something you need to know. You want to always know who you’re talking to.
Sharon: It might be a relative or somebody, but ultimately the only person that can sign that real estate contract is is the personal representative. So, the administrator, court-appointed administrator, or the named executor. They are common terms that are jointly called the personal representative. Now, when it gets to that point, the next thing that happens is the assets are sold and that’s right smack dab in the middle of the probate. That’s when any property can be sold once the, you know, their personal representative is in place. After that, the creditors are paid, the heirs get what’s left in. The estate is closed, so you backtrack a little bit and go, OK, who are the creditors? Well, they are anyone that the deceased owed money to. There could be a mortgage on the house, there could be a home equity line, there could be car payments, certainly hospital bills, nursing home and funeral expenses. Those are all the creditors. So as an heir, you can see yourself Deni. If you were an heir and you’re wanting to inherit whatever you’re going to inherit, you’re smack dab at the bottom of the list. So, you are very motivated to push this process along. It’s just the way it works, and it is a way that it’s real estate investors. It’s a way we get to help them. We’re problem solvers, we solve problems and we’re able to help these people that have this. As the business of settling the estate has landed smack dab in their lap and they’ve got their lives and they don’t have time. They might have children, whatever it is, they’re doing their careers, but they’ve got this unwanted property that they have to sell, and that’s where we come in.
Deni: So, I’m assuming that you get really good prices in order to help them get through this process.
Sharon: Well, it’s like any other real estate deal. You make an offer on the property now there will. Some properties, really nice properties that will be listed on the MLS properties that need work. Gosh, the people that are handling this estate, usually they cannot afford to make the repairs and the updates needed to list the property on the MLS. But even if they did have the money, why would you want to put 20 30 thousand dollars into Aunt Mary’s house to get it ready to sell on the MLS? You’re looking for a quick solution to get rid of this property, and that’s why they are so motivated to sell. They don’t want the property.
Deni: Now, do you have to assume any of I mean, I’m sure you probably I know. And I’m going to put a link in the chat show and has a course on how to do this. But just to give you a little example. Me and some investors, we just bought a piece in Florida, and it had some issues on that. Florida is a tough state. I’m learning for probate. So, do you find this? There are some difficulties. Or are you pretty, have you been able to kind of hurdle over most of them?
Sharon: You know, I just look at them as problems. They’re just problems like we come across a problem. I’ve have bought a number of properties from folks in Florida, and I’ve not found it to be a particular problem per se. I will say this the process is pretty straightforward now. With that being said, every state has a little bit different nuance to it. And all you have to do is address the nuance. Now, for me, my go-to person is my real estate attorney. I’ll just go to him and say, Look, there’s a situation they’ve come back with, and he’ll say, don’t worry about it, I’ll take care of it. Sometimes he works in conjunction with another person, but it’s not really. It’s not really been a problem for me.
Deni: Very cool. So why should investors add probate to their, you know, real estate investment strategy?
Sharon: Well, and I don’t want I want you to take this the wrong way, but you truly have a never-ending stream of leads, so you have a never-ending opportunity to help people. Know death is part of life. It’s inevitably going to happen to all of us. So, you have to look at a way to help these sellers and once you really grasp that, you can help these sellers. And that month, after month after month, you will have a steady stream of leads for your business and a steady stream of opportunities to make their life easier. It’s really a no-brainer, and you add to that the sellers are motivated. They want out of that situation. They want to just get on with their lives and they have to sell the property. So, it’s not a matter of if they want to sell it, like in a traditional sale. If you are thinking about selling your property, you can waffle back and forth. But in this situation, they have to sell the property to close the estate. It’s not if it’s in there, they’re going to have to sell it. So, they have a lot of reasons to work with you, especially on distressed properties, which is what most of us are looking for in off-market deals.
Deni: Do you find that there are, I mean, what seems to stop people from getting involved into this type of investment?
Sharon: You’re talking about investors. Well, it comes down to a few core things. And first thing is they don’t really understand how the probate process works themselves. For me, when I look back, I discovered probate around 2008 and there was literally no competition Deni. I mean, you might have two people, three people. It was it was crazy
Deni: That a lot.
Sharon: Oh yeah. Well, if you think about it, if you’re in a metropolitan area with you, even let’s say you even have 5000 agents and a couple of thousand investors. That’s a lot of competition. If you’re working on the MLS and in big metropolitan areas, there’s a lot more competition than that right now. Off-market deals, if you’re reaching them by direct mail and direct mail, marketing is by far the best way to reach out to these folks. You don’t want to call them because they’re not going to be happy that you’re called them, but you are once you so as from an investor’s point, they have to understand the process so that they don’t have the education that they need. And then there’s the fear of just talking to these people. How do you talk to these people about death? Well, I’m going to tell you that it rarely comes. You’ve rarely discussed the actual thing that happened. It kind of goes like this. You show up at the house and it just like any other deal. I would say, tell me about the property and they start telling you about how the house is this old and their mom cook dinners in this very kitchen here. Or you might see cookbooks and say, oh, was your mom the cook? If you know the mom passed away
Deni: Or want to make some type of a connection is here to get your house
Sharon: That you never say that in the beginning. So, you look for visual clues now, if you know the dad passed away and you see golf clubs in the corner, you might say, oh, wish your dad the golfer. No, that was my brother. And they say, oh, well, tell me about your dad. But you notice we’ve not even gotten to the house. So, when they’re done telling their story and I will say in probate, you need to be a good listener because they often grew up in this property and they’ve got big memories. But the death of this person never comes up, you just have to learn how it’s a little bit special way to build rapport with these people. And then the next thing that hangs investors up is they don’t know how to market to them because back again is to what do I say? What are the words I put on the paper? Because by far, the best way to market to them is with a white computer-generated letter that says, Dear Deni, it’s not dear person or, you know, you want to personalize the letter and then they know that you’ve taken the time to really learn about them and their situation. But you really only need four pieces of information, and that’s the name and address of the deceased and the name and address of the executor or the personal representative. That’s all you need. You don’t need to know any of the other stuff. And then the last piece of this is the man said. We talked about the mindset of the seller is they’ve been through a really tough situation, but they have the business of settling the estate to take care of. It’s just a reality. So as an investor, you once you adjust your mindset to, I’m providing a valuable service that these people really need, then it all becomes really a simple conversation. It really and truly does.
Deni: Because you end up actually, you’re helping really, really and you make money in the meantime, but it is a helpful area and, you know, I have to tell you, it’s not something, it’s not an area I thought of. I’m getting involved in.
Sharon: It’s for most women, it is a simple conversation. It’s kind of like talking, you know, you have these types of conversations and negotiations and things with people all the time. You just really don’t put it into that context. It’s just a conversation where you will move naturally into them, telling you what they know about the property and then you are taking the next steps. And in an investor’s mind, it is just a huge roadblock. It really is getting to talk to these people and getting yourself in the right mindset. But it really doesn’t have to be that way because it’s not creepy. It’s not weird. It’s just the same conversation you should be having with everybody. The rapport-building conversation.
Deni: It’s true. It is true. And I think sometimes we talked a little bit about this earlier before we got on that. Technology can take the personal. It definitely provides convenience, but it takes the personal out of it a lot. And yeah, and this definitely puts that back in it. Let me ask you how somebody like me, a complete novice, wants to get involved with this. How did how where do we start?
Sharon: Well, you’re going to need to know how the process works in your area. As I said, it’s pretty general, pretty straightforward. In most states, you should definitely look up the process for your state where you are. Just look it over. If you have a closing attorney. Here we use attorney summary as you use title companies but talk with an attorney and they can educate you on any nuances in your area. Actually, there really are very few roadblocks anywhere. Honestly, that’s the truth. But just educate yourself, and probably the biggest challenge is learning where to find the leads. So, there are over 3300 counties in the U.S., and one of those counties has a little bit different way to get the leads. But start with your friend Google and Google Probate, plus your county probate, plus your city. They’re online in many areas, they’re in the newspaper, in some areas. So that’s your biggest that’s your number one job is to find out where you get the leads.
Deni: Now you do have a course that somebody can go through and take.
Sharon: I do. It’s called probate investing simplified, and you can find that at probateinvestingsimplified.com.
Deni: I wrote that it’s also on your website, right? Just put your website in the chat.
Sharon: It is. Yeah, yeah. The Louisville Gal’s real estate blog is kind of a hub for the blog, the podcast, and for the course. You can find everything from that one site. You can truly learn to become a probate investing expert in six weeks with my course, I will show you everything you need to do. The one thing that is completely on you because there’s no magic button for finding out where the leads are in your county is. You have to do a little bit of detective work and find out how to get the leads from your county. But look in the newspaper, Google it. Ask your closing attorney where the legal notifications are published. You know foreclosures are published back in the legal notices. If they’re in your newspaper, that’s where they’re going to be back in the legal notices and in my area, they’re only in there once a month.
Deni: Oh, OK, OK. Wow. Do you find that there are some states that are easier, or do you just say, you know, in your location? Or have you moved into other locations as well?
Sharon: Well, as far as investing just my own location, there are some areas that are, I think of New Jersey. In New Jersey, you have to go to the courthouse to get the leads. God bless New Jersey because that’s hard. I used to think our area was really behind because they were in the newspaper. But they have every shred of information you need. You don’t need date of death or any of that stuff. You just need to know who the deceased was and their address and who the executor, the personal representative, and their address are. You know what their address is. That’s all you need to work in the niche of probate and then don’t doorknocked. Don’t call these people. I always tell folks, remember somebody’s mom or dad or somebody close to them. Be respectful of that. There’s no getting being first with probate. Your know-how with so many houses, it’s whoever gets there first. It’s not that way with probate because they have to get ready emotionally to sell the property. So, you don’t need to be first. You don’t need to try to go in a side door. You just need to have a message for them that I’ll be here when you’re ready to sell. That really is your message.
Deni: Wow, which is amazing. I have to thank you, Sharon, for this information. Tim Dooley, one of our viewers, said great information. I urge everyone to check this out. It’s Brian and I talk about diversification all the time, and this is another great way to diversify your real estate investments. Again, go to the link. It’s in the chat. And is there any other tips or tricks that you can provide us that have?
Sharon: I would say the biggest roadblock is your own mindset. Believe in yourself. Believe that you can do this because you get to help so many people. As I said, you’ve really these people want and need our expertise and you can build an entire business off of probate. I do believe you should like you said, you should diversify. I don’t believe in putting all your eggs in one basket, but this is a consistent source of leads month after month, year after year of people that want and need our help. So, believe in yourself that you can do this.
Deni: I love the part that you actually are helping people, and it’s a tough process. I mean, I’ve been through it and it’s just not an easy process. So that’s awesome. I thank you, Sharon, very, very much. And a happy New Year and everybody will see you next Tuesday. Brian is on his way back to Brazil. Have a great day, everyone.