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US Probate Leads with Leon McKenzie
Since a lot of people asked me what the best kind of leads are, the best kind of return of investment, etc., I invited my good friend Leon McKenzie from US Probate Leads.
Leon McKenzie is the chief operating officer at US Probate Leads, a company he co-founded 12 years ago. The company has grown to become the leading provider of probate leads for virtually every county in the United States, using a national network of researchers who collect data directly from individual probate courts each month.
In this episode, Leon shared how they collected, sorted, and organised probate leads. He also discussed probate and its process.
- How they got into probate
- Putting an organisation together to find out how to pull data out of the counties
- Collecting and sorting data
- Mentoring people on how to use the data
- Figuring out how to take the program nationwide and reaching out to companies
- Capitalising on the business and making data available to people
- Understanding the process
- Why probate makes sense
- Motivated sellers and projections
- What probate is and how it works
- Role of the executor
- How long the process takes
- On marketing
- Tracking what marketing strategy is working
- Working with his son and daughter
- Certification programs
- “If you're going to be in this business, you have to provide quality information.”
- “You want to get leads that people have a high probability of selling.”
- “You have to be consistent.”
RESOURCES AND LINKS FROM THIS SHOW:
Larry: Welcome to the Brain Pick-A-Pro show live from Lake Wylie, South Carolina. I’m Larry Goins. Thanks a lot for watching. Really excited today because I’ve had a lot of people asked me about what’s the best kind of leads out there, the best kind of return of investment and where do you get them and where do you go and that sort of thing, and I’m really, really excited today because we’ve got my good friend, Leon McKenzie, on from US Probate Leads. What’s going on, buddy?
Leon: Hey, how you doing, Larry. Good to hear from you. Hey, we’re excited as well. This is really a great opportunity. Thanks so much for asking us to be part of this.
Larry: Sure, man. Well, I wanted to do that because so many people talk about, you know, if they’ve never done direct mail, if they’ve never gotten started in marketing. You know, you gotta make the phone ring, right? And what’s the best kind of list, what’s the best kind of prospect, you know, and I always tell people, go after a prospect that is motivated, that you know that they’re typically gonna sell the property, they’ve gotta sell the property. It’s not just somebody you’re reaching out to randomly. It’s somebody who is in a situation that they’re probably going to sell a property, right? And that’s exactly why we have you on. So, why don’t you tell our listeners a little bit about yourself?
Leon: Hey, I appreciate it, thanks again for the opportunity. Yeah, about fifteen years ago, my son and I got involved in probates. We got to looking at what types of opportunities were out there and we ended up attending a presentation that was being done by some folks that were working in the field at that time, and what they would do is come into town and run some presentations and they’d track quite a number of investors over to the local hotels and stuff and then they would talk to them about probates, and that was our first introduction to it. It was an interesting introduction. When we got into listening to the presentation, it just made sense. I am a seventy-year-old fellow. I've been doing entrepreneurial-type work for years, all my life actually, been involved in real estate probably for fifty of those years and I knew that the probates made a lot of sense. There’s no question in my mind about that. I was interested in what, you know, the state of the art at that time was, so we attended the presentation and we talked to the people, we listened to the stories and things like that, and what we came to hear was that probate information is public record stuff, so you stop and say, “Wait a second, you know, that’s interesting.” Now, our background was in IT, so at that point in time, IT was really taking off and I know I had worked with a lot of large companies prior to that, and we knew that there was some way to go out and get that data, probably easier than what was being presented at the presentation. So, we put this organization together and we started – went into counties and we started looking at how we could actually pull data out of the counties. Lo and behold, we found that probates are something that just are being done like they were done fifty years ago. There’s a lady in the courthouse that runs that probate office and the problem is they’re just aren’t all that many probates to be had within each county. Now, there’s three thousand counties out there so on aggregate there’s an awful lot of probates that are available, but we see probably 125, 150, 175 per million population, at least we did at that point in time. So, what that meant – we’re in the Dallas-Fort Worth area. We’re seeing probably 200, 225 probates per month coming out of the Dallas-Fort Worth area. When we put our operation together, and here we are, big IT guys, thinking, “Well, this is gonna flow. We’re gonna have all the information, that’s where we should be.” We found pretty quick that the only way you get this data is physically going into the courthouse. You have to send somebody in. They have to go in walk up to the desk. They have to talk to the people there. They have to understand how to get the data, and then once they do that, they have to sort the data, bring it in, and start trying to make some kind of sense out of it. Long and short of it is just physically was not available to us by doing any automated system approach. We turned around and jumped into this. We decided this is a business that needs some help and it needs some strategy and some work and that we had the capabilities to be able to make this happen. At that point in time, we were pulling probably about six hundred probates and we meaning me. That was how I would work it, so I would hop in the car and I’d drive to Dallas County, I’d drive to Denton County, and then Collin County, I’d drive out a little bit farther to Tarrant County. Those are the four major Metroplex areas in Dallas and we were collecting six hundred, seven hundred probates a month or something like that. And we knew we were on to something ’cause we could take that information and then we started mentoring folks and teaching them how to actually use that data and making something happen with it. We worked that process for probably about four years, had some good success with it, had a number of people, at any one point in time, we might have ten people that we were mentoring and those folks were having good success with the program and we felt like we really were on to something. We wanted to take that program nationwide. That was the whole concept when we got into it. We figure if we could do it in the Dallas area, surely we can do it in Houston, we can do it in San Antonio, we can do it in Boston, so we jumped into this and started looking at how to make that happen. And once again, I started looking at the fellow that was actually pulling the probates and doing the mentoring and thinking, “How was that guy gonna take this business model and turn it into something that makes some sense?” And what it boiled down to pretty quickly was Leon was gonna take off and he was gonna drive to Austin or San Antonio and he was gonna live there for three or four months, maybe six months, and try to get that one up, and I just plainly wasn’t smart enough to be able to figure out how to do it and I said, “Wow, this isn’t working.” So, what we did, it’s interesting, we went ahead and played with it for a while but we decided, you know, you do have to do this with scale. You have to really reach out and reach enough people that it makes sense.
Leon: So, we started doing that. We reached out to some large companies. We got lucky with some groups that we were working with. We let people know who we were. Keep in mind, we were well-respected at the time. The work that we were doing, the only type of work we did was based on referrals so when people came to us, they knew who we were, they liked what we were providing, and all that worked pretty well for us. So, today, actually pull, if you can believe it, sixty thousand probates each month.
Leon: We’re the largest company in the country doing this type of work. We kind of lucked out a little bit but I would say that it’s more case of just being tenacious. We stuck with it and we did have a pretty good handle on what we were doing. We reached across the country and we’re in – we have pulled data in almost two thousand of the three thousand counties that are out there, and we have hundreds of researchers that work for us. The hallmark of the things that we do with the data is once we get that data in, then we analyze it and we ensure – we send it through all kinds of data, third-party data processing people and stuff like that, we probably have eight different ways to collect data and we do everything from telephone numbers to addresses and just – you name it. If you’re gonna be in this business, you have to provide quality information and that’s what we do. We provide really topnotch quality information. So, I’m proud of it. It’s a neat little company. We have a number of people that we work with, that have been with us forever and the folks that really understand how to do this business do quite well with it, so in a nutshell that’s kind of where we came from and who we are.
Larry: That is awesome, man. That’s really, really good stuff. You know, a lot of people don’t understand the work that goes into generating a probate lead, do they?
Leon: No. When you look at it, you would think it’s public record information, right? That’s what you're being told.
Leon: So, let’s just go down to the courthouse, we ask the lady behind the desk, “Let me have the last fifteen probate records,” and then you think, “Well, I’m gonna just go start processing that data.” That little lady behind the desk doesn’t want to talk to you. She’s got her own business, she’s got her own work that she has to do and there are counties where they just make it, you know, difficult to be able to get hold of the data. Now, the data is there. It’s physically in the courthouse. No question about it. As a real estate investor, a realtor, the real question is, “Is that what I wanna do in my time? Should I be down at the courthouse trying to figure out how to get this data, how to pull it, how to make something happen with it?” You know, it’s resounding – doesn’t make any sense at all. I mean, if there’s somebody that can do it, that can provide it to me each month and I know I’m getting high-quality data, then I should be doing that. That makes much more sense. So, there was a business here and we were able to capitalize on that and make that type of data available to people, so I would say that getting the data yourself, no, it’s not even close to being easy. However, getting that data from somebody like us and then taking advantage of that data, that’s trivial, and we make that data available every day and have a fully automated system to be able to do that and people can come in and start working with us, you know, very quickly.
Larry: That’s really, really good. You know, you mentioned a couple of things that I wrote down that really just blew me away. Sixty thousand a month nationwide and you guys covered two thousand of the three thousand counties in the whole U.S. That’s amazing. That’s taken many, many years and many connections and business ventures together to be able to get to that point and you guys rock. That’s awesome.
Leon: We appreciate it. You know, had you asked me when we started, I think at one level we would have said, “Oh, yeah, we’ll just go get this data.” Once we got into it, we found out this was not a simple process. I would say that we managed to grow every year. We did do that. The sixty thousand is the current number that we’re hitting today, and what we do, we go into most of the major, well, all of the major MSAs, the major city areas, population centers. If you look across the country, you know, from a demographic sense, there’s probably about eighty of those that constitute about 80 percent of the population of the U.S. You know, the rest of the folks live in rural areas and stuff like that. So, we are getting data, I would say, today probably for at least 70 percent of the population of the U.S. and we’re proud of that. That’s a good number and no one else even comes close to being able to do anything like that and if you’re gonna work with somebody to get this type of information, you know, it just makes sense, go with the folks that really know what they’re doing and there’s an awful lot of learning that has gone in over the last fifteen years to really be able to understand this process.
Larry: That’s exactly right. You know, when we first started this podcast a few minutes ago, I mentioned, you know, when people ask me, “What kind of leads should I get?” Well, you wanna get leads that people have a high probability of selling, right? I mean, yeah, a lot of people mail just to absentee owners but if you have a specific lead that you know there’s a high percentage, and I know you guys even have some stats on that, it’s something like 65 to 75 percent of them are gonna sell in the first, what, four to six months or something?
Leon: That’s pretty much what we see. You know, we’ve been doing it for a long time and I’m always asked and it is interesting. Somebody would come to me and just really push me. “Hey, I have to have data just as soon as it hits that courthouse, just give me that guy’s name because I wanna be the first one in to talk to that individual.” You know, we sort of laugh at that. I mean, what happens in probate, and I’ve been through that process several times myself and that’s a tough time of your life, that is really, really difficult and the very last thing you want is somebody on the telephone, or have a mailpiece in your box saying, “Hey, I can buy that property that you’re sitting there holding on to and I can pay you top dollar for it.” In most cases, that individual has many, many other things on his mind to think about and it just doesn’t make sense to be hitting that guy too early. Now, what’s interesting about it though, if you talk to that individual, you would probably – you’ll hear all kind of things. He might hang up on you, he might pay you the courtesy of listening to your pitch, he might not, you just don’t know exactly what’s gonna happen. You may find somebody that turns around and says, “I’ll sell you the house tomorrow.” I mean, that happens, happens in about 2 percent of the cases but it just doesn’t happen, but what really does happen is that after some period of time, and what we have found anywhere from, I’d say six weeks to three months, that individual, he has to pay, when he takes over that estate, he has to pay all the bills associated with that estate. It’s a trivial process if he’s just writing checks out of money that’s in the bank, you know, that’s easy. He can do that and it doesn’t bother him.
Leon: That money starts to run out at some point in time andwhen that does, then all of a sudden, the executor of that estate, he has to turn around and make up any shortfall on it and that’s why folks look at this type of process and if you hit the fella at the right time with the right story and you have the right message, you’re empathetic, he understands that you’re somebody that really cares about the situation that he is in, you’re gonna find some nice deals out there, and that’s the way that this whole system works. So, we typically see between – I’d say six weeks to six months or so where probably 70 percent of the properties that are going to be sold would be sold. Interestingly enough, for the next almost two years after filing, you will still see properties that are showing up in probate and it makes sense, right? Somebody has passed away, maybe they listed it right out of the chute and a year later they had somebody in and they haven’t done anything with it, yet it’s still on the books as a probate property and they need to do something. So, there’s a lot of, lot of things like that happen. Back to this question of are probate properties some kind of property that you should go after and that makes a lot of sense? I contend that there just is nothing like it. These properties are properties that are owned by the estate. They’re going to be passed down to an heir. In many cases, they’re gonna be passed down to multiple heirs and it’s really kind of like found money, keep in mind all these heirs and people, they already have their own homes. It’s not a case that you’re buying something out from them. This is a home that’s sitting there that probably nobody is living in and it’s almost an albatross in some cases and they do need to do something or another to be able to move that property, so as an opportunity for an investor, it is the best opportunity out there and if you handle it properly, if you get a little bit lucky, if you catch the guy at the right time, if there’s chemistry between you and the fellow that you’re talking to, you’re gonna do quite well with this system and it’s just a really fine system for any investor and it’s something that everybody should be looking at at some level.
Larry: The other thing I’ve noticed too especially with probates is, you know, a lot of people, to get any traction at all in their business, they might have to mail out three thousand or five thousand or ten thousand direct mailpieces. With probate, I mean, you can literally start with, you know, twenty-five leads, fifty leads a month, a hundred leads a month, something like that, and it keeps your costs way down. Yes, probate leads are more expensive than just an absentee owner, but look at what you’re getting. I mean, this is somebody that’s got a high probability of not only wanting to sell but needing to sell and you mentioned the best part of everything is they’ve got nothing in it. They have nothing in the house, anything they get is profit, right?
Leon: That’s exactly right. They’re sitting there looking at it, trying to figure out what to do with it. The whole definition of motivated seller. This is the motivated seller. There’s no question about it. One of the interesting things about this also is today – we do quite well with this. We have sixty thousand probates. I personally think there might be anywhere from ninety to a hundred thousand probates filed each month around the country, something like that. We do know from statistics and from looking at different pieces of information, that in the next ten years, there will be probably ten trillion dollars’ worth of properties passed down to the baby boomer generation so think about it. You know, the baby boomer generation is sixty to seventy, something like that, I happen to fall into that range and, you know, parents are passing and properties start to be turned down, ten trillion dollars will be passed down to those people but extend that out to the time that the baby boomers start hitting seventy-five to ninety, now all of a sudden the projections are thirty to forty trillion dollars will be handed down at that point in time. There’s nothing like it. I mean, and people don’t realize it so we were fortunate, we looked at something that seemed to make some sense and we stuck with it and we now have the information to be able to provide to people but the guys that we’re working with – when I’m saying sixty thousand a month today, I fully expect that to triple here within the next ten years. I mean, that’s just the nature of it. There are a lot of folks that are going to pass unfortunately and when they do, those properties are gonna turn up, so foreclosures, all these other things that folks have gone through and were really good lead sources for them, it won’t be that much longer before people are turning around saying, “Wow, I should be in probates. There’s no question about it and that’s the place where most of the things are happening.” And there are some remarkable opportunities out there. If you think about it, anything that anybody has ever owned will go through probate at some level. You see things being put into trust and stuff like that and that’s a little bit out of our bailiwick. We work mostly – we work with probates in the probate courts, but just the same, there is a number of properties, excellent properties that are available and folks that have an opportunity to pick those up really do well with them.
Larry: That’s good. Can you give us just, I mean, there may be some people watching this. They’re like, “What the heck is probate? How does this whole process work?” Can you just give us a little overview about kind of what happens when a person passes away that owns real estate and kind of that process that it goes through.
Leon: Sure, sure. I would be happy to. Any individual and it could be any individual that’s associated with that deceased, it could be a friend, it could be a child actually, it could be a relative. Typically, it’s gonna be a relative and when the individual does pass, somebody is going to step up and say, “I will take care of this estate.” Nothing magic about it whatsoever. There may be five kids in the family and one of those kids is gonna, you know, everybody’s looking at each other, “Who’s gonna do this?” and somebody’s going to do it and they’re gonna say, “I will take that responsibility.” As such, they will go down to the courthouse and they will fill out the paperwork necessary to make them the executor of the estate. As the executor of the estate, they now have the authority to settle that estate and that means identifying all the assets in the estate, identifying all the liabilities, and then identifying the people that the estate might be passed down to. If there is a will and surprisingly enough, the number is probably about 20 percent of estates actually have a will, if there’s a will, then the individual himself has defined how he wants the estate to be settled and how he wants it to be divvied up. If there is not a will, then you have to flip back to the particular state and the state has a set of rules as to how properties would be settled and there’s hierarchies and things like that that would be followed. Once the executor has assumed that role, then he has to go through the process of figuring out what is in the estate, and it’s tough. I mean, anyway you think about it, this is probably someone, a loved one, and now you’re going through their entire life that they could have personal properties and there may be some really valuable personal properties in there. They might have residential properties. They could have commercial properties. They could have farm and ranch properties. They could have farm animals. They could have businesses. Anything that that individual owned is part of that estate and what the executor, his role, is to go through and figure out what on earth are all the assets in the estate, and then he has to go back and identify what was owed on those assets and, you know, obviously there’s all kind of liabilities sitting out there and that’s not a trivial process. I mean, who knows what somebody else owes and going through their paperwork and trying to make sense out of it is – that’s a process, so they got to figure that out, and in some cases it gets a little tricky because, you know, family situations being what they are, there may be relatives around that you just simply haven’t heard of before, something like that and all of a sudden they have a claim on the estate.
Leon: So, it doesn’t take long and it happens with the very best, the families and the very smallest of groups before somebody is looking at somebody else saying, “When am I gonna get my share and what are you doing to make this happen?” The whole role of executor, that’s a tough situation for somebody, and it’s not a situation you wanna go into unless you really have a pretty good handle on it. But once that individual gets into the process and he starts making sense out of it, he will probably find, at some point in time, that the money is starting to dwindle down and he has to do something or another to be able to pay bills, and the best way to do that is through residential real estate, and he has the authority as the executor of that estate, he doesn’t have to close the estate, he can go out and sell the property that’s in that estate and make that happen, so that’s the whole concept of probate investing. You’re looking for an individual that’s at a point in the estate process where he has to do something to bring some money into the estate and when you reach out to him, you presumably had done your homework and you have some kind of solution that’s gonna make a lot of sense to him.
Larry: That’s really good. That is really good. And just to clarify, is an executor just another term for what some people call a personal representative?
Leon: Yeah, most – what they ran into was there is an executor, an executrix, an administrator, an administratrix. I mean, the terms just started getting out of control so what most states have gone to now is the term “personal representative” and that’s a little easier way to understand who that person is. Yeah.
Larry: Good. How long does this process take? In other words, you know, like, if someone gets some leads from you and they’re doing a direct mail, they talk to the people on the phone, and the person says, “Yeah, I wanna sell my house. My dad passed away, you know, two weeks ago or whatever or three weeks ago – ” I dunno if that’s a realistic timeframe of getting the lead but, you know, “Yeah, I’m ready to sell. You know, I’m the executor or the personal representative of the estate.” How long is that process before they could actually go to a closing and bid over that property and sell it?
Leon: There are some restrictions that are done at the state level. As an example, California is a little more restrictive in terms of the amount of time they have. However, most of the other states, it’s really pretty wide open and that executor, as the estate manager, does have the authority to be able to do something with the property. I’ve seen properties close in three days. It depends on the individual that’s actually making the offer and how he is organized and does he have his paperwork together and does he understand what needs to be done. Simple fact is, the executor has the authority. The investor that’s coming along presumably has the money and those deals are cut every day and they can be cut in as little as three days and that’s not to say that you won’t run up against the situation that there’s some paperwork that needs to be filed and you need to do some researching. You always hear these horror stories. Those are 10 percent of the cases. I mean, the majority of efforts that you have out there are straightforward and they turn over real quick, but when you talk to somebody – and a probate is one of those terms that people probably don’t understand completely, more and more people are going to be understanding it because it’s gonna become more prevalent in their life, but what happens – you start hearing horror stories. “Oh, man, that was tied up in probate for six months to a year. I had to research all kind of paperwork. We had to go find the heir and stuff like that.” I’m not saying that those situations don’t happen. I’m saying go out and – come to me, buy enough probates that – those are the 5 percenters and go sell the 95 percent, that makes sense. There’s a way to do that. You know, the other deals, if you hold on to them and work them, they’ll come around for you at some point in time and those may be your best solutions too.
Larry: That’s really good. That’s a really, really good overview of the whole process. I’m sure a lot of people were under the impression the estate has to be probated and finalized before they could convey any property, but I like what you said that the executor or personal representative, they can convey that property right away. They have the authority to be able to do that which is good.
Larry: That’s awesome. So, tell us a little bit about the marketing to these people. In other words, I’ve heard different stories and different people say different things about, you know, “You gotta market to them different,” “You gotta send them a different kind of letter or post card,” and I’ve heard some people say, “Don’t even mention about that they’ve lost a loved one. Don’t even mention it because they already know it and it doesn’t really mean anything coming from you anyway.” What are your thoughts about that?
Leon: When we first got into this, we looked at it pretty seriously and we did our number mailings and we reached out to people and talk to them quite a bit to understand what was happening, and we looked at this – you know, what was happening with other folks, how they’re representing information to these guys. And I heard exactly the same stories you were mentioning. And what – the interesting ones, the ones that I thought were fun was this fellow says, “I have written the one letter that when you mail my letter out, everybody that’s in probate is gonna love this letter and they’re all gonna roll over, they’re gonna sell you their property for fifty cents on the dollar. This is the easiest money I have ever made. Just buy my letter.” That’s a pretty expensive letter. I mean, just think about it. Does that make any sense at all? Really? What we have decided and what we learned from this whole process is no one letter, no one story, is going to be received by any individual any better than – I mean, everybody’s gonna have their preconceptions of what really makes sense to them and what they are interested in hearing. If you send out a hundred letters, ten people will take a look at that letter. It doesn’t matter what the letter was, and they’re gonna like that letter. That was a pretty good letter. It really hit home. It was a good story. Maybe you turned around and you really empathized in the letter. You explained to them that you’ve been through this process and you really can understand and you can relate and stuff like that. Now, there’s gonna be a certain percentage of people that are gonna look at that and just be totally turned off by the fact that, “How can you possibly know what my situation is, who I am, and what I’m running into?” But what’s happened is that there is some percentage of people that do relate to that. You know, the natural extension of that is if you had five different letter types and what we recommend is a postcard, an empathetic letter, a formal letter, an informal letter, and the yellow letter. Surprisingly enough, when we first started this, we were tracking what was really working and what wasn’t working, and I had the investor call me and he said, “Yeah, I just did a mailing and this is the greatest stuff I’ve ever seen. I had a 28 percent return.” I said, “That’s a pretty good return.” I said, “What did you send?” He says he sent a yellow letter, it was a two-line yellow letter. I couldn’t even begin to explain that. It doesn’t make any sense to me at all but whatever he did on that particular day, there were people that were really responding to that letter. Now, I gotta admit, I haven’t heard another 28 percent story, but the message that we give to people is you do need to reach out to these folks and you need to reach out to them with a story. Maybe – we suggest sending something out to them five times. Do it at month 1, month 3, month 5, month 7, and month 12. Keep something in front of them. The guy who keeps something in front of them is the guy who’s going to do the best with this type of story. And vary the mailing. Send the postcard the first time, the second time send a formal letter, third time send a yellow letter, and see what really works for you because no matter – I can tell somebody use my letter and we have letter samples and we’ve been doing this for a long time so we know exactly what to do. I work with folks that just swear that they can turn around and analyze all the letters that are out there and they can change the color on the letter. Like, you know, the ink and they can change the type of letter that is put in, the type of envelope and stuff like that. There is some magic, something or another that happens that this particular solution works better than that solution. I don’t believe a word of it. I think the answer is go out and reach out with different letter types in different pitches and I do think that there is a lot of luck – a luck to the draw. That’s just the nature of it. You’re gonna find that some things work and one month, something worked and one month, something didn’t work. The real key to the stuff is keep something out in front of folks. Think about it. If you’re doing – if you’re getting a monthly list, like I have folks – I recommend typically about a hundred leads because I think a hundred leads gets you enough information going out that you can do something with it. So, if you send that hundred leads out and you send it on month 1, the next month you’re gonna be sending another hundred leads, right? So, I am saying send at month 1 and month 3, 5, 7, so on month 3, you’re sending the second mailing to that first set and the first mailing to the second set. If you run that whole concept out, what happens after a year is that you’re now sending out five hundred letters. You’re sending out to – you know, and they go back representing the different timeframes that you have. Once you reach that and you’re actually making that happen, now you have a letter going out within six weeks of the person actually passing away, and typically what we find is people will file for probate within thirty days. That’s kind of the nature of it, so you have something reaching them relatively early in the process and then you also have something that’s hitting them at the back end of that, after twelve months of time and they’ve already seen other letters from you. Once you do that, you’re gonna reach critical mass, you’re gonna start seeing some activity from people, and this becomes a business, and it takes a little bit of time but if you do it right, you’ll do real well with it.
Larry: Well, it’s just like any kind of marketing. You have to be consistent. You have to be consistent. I wanna just reiterate a couple of things you said. You mentioned about send out different types of pieces like a postcard, an empathetic letter, a formal letter, an informal letter, and a yellow letter. And then you’re gonna, you know like, varying your mailings and you wanna mail them at least five times. That’s very, very important and at what months did you say to mail them?
Leon: We recommend – and there’s nothing magic about this but I think you wanna get some stuff out in their hands early so 1, 3, 5, and then 7 would catch – you know, it’s been out there a while and I definitely would do it at month 12 and what I’m looking for at that point in time is those houses that were listed right off the bat and you’re trying to reach those guys. And I’ll be honest, I would hit another one at eighteen months because we see people, you know, having some success at that point. And keep in mind that when you reach somebody and they’re excited, they call you back and they got your letter and this is something of interest to them. The farther along in the process they are, that guy calls you at month 12, that’s a really motivated seller ’cause he’s sitting there and he’s been holding on to this property for twelve months and he’s thinking to himself, “I have to do something with it.” That guy at eighteen months probably wants to give it to you. So anyway, I mean, there is a method to it and you just wanna continue to reach out to them and the fellows that I work with and we have hundreds and hundreds of folks that we work with across the country, the ones that are systematic and answer their phone, I mean, you know, there’s a way to sell these things, right? It’s just like any other property. If you really know what you’re doing and you have the ability to be able to communicate, then this is a great opportunity for somebody.
Larry: Man, this has been some really, really good stuff. I really appreciate you sharing this. One of the things that I run in and I’m sure a lot of other investors do from time to time is someone has inherited a property but that property or that estate was never probated, and it might have been from 2009, 2015, whatever. Number one, you know, what’s the process for them to going back and going through that process and, number two, are older, preexisting probate leads a good source as well?
Leon: Definitely. Any type of property where somebody has been holding it for any period of time is going to go right up to the top of the list in terms of the motivated seller. Now, what’s interesting about that is that motivated seller may not know he’s a motivated seller. I’ve heard of situations where, you know, a piece of property – there was an out-of-state fellow that inherited the property, so he’s in Michigan, it’s a Dallas, Texas, property. They have it rented down here or maybe they don’t have it rented, maybe it was already paid for. So, it’s sitting down here. So all he’s doing is paying taxes on it. And maybe he’s wealthy enough or maybe he’s in a situation where he just doesn’t need that money. However, that is a piece of – that’s the albatross, right? That’s the one that’s sitting out there that when it’s brought to his attention, he all of a sudden says, “Wait a second. I didn’t even know I have that sitting out there. I need to do something with it.” So, and those are out there. There’s all kind of different situations out there and that’s just a natural one. What would happen in a situation – and we’ve run across those and you will hear of those where somebody failed to probate. Typically, what happens in a situation like that is one of the spouses passed away and the other spouse held on to the property or something and maybe ten years later, the other spouse passes and when that happens, then they’ll go ahead and file for probate for both individuals. So, you see that frequently. The best I can do is I can go to the courthouse and pick up the ones that are physically available. Now, one of the things that we have been looking into and I’ve heard it a little bit out there, the term called “pre-probates” and what you can do is go out and mine the obituaries and what you’re doing when you mine obituaries is you’re looking for potential properties that might be owned in those, you know, from people that have passed and now those could be going into trust or wherever. There are folks that make that sound like, this is the next fantasy and anybody can go out and do this, mine the obituaries and get the data. It ain’t an easy process. We’ve looked at it and we’re very good at what we do and it’s possible to get some information out of that but it’s not anywhere near as easy as people seem to think. You know, what that brings – the question that that begs is when people pass away, how many of those people are going to actually end up in probate? And the numbers that we have seen are about 20 percent, so, you know, what’s happening with the rest of the people? What’s happening with the rest of the properties? And there’s all kind of things. In some cases, they’re going into trust, in some cases it was deeded over to somebody and just passed down, and most cases the individual didn’t have properties to be able to pass down, you know, unfortunately, that’s probably the vast majority of people, you know, property might have been foreclosed on or something like that. But the properties that are out there are available. One of the things that happened to us when we first got in to this. We looked at – we were told by the guys that were working it at that point in time that you really needed to know where the inherited property was and you had to have the address for it and everything else. And the typical letters at that time said, “I’m Leon McKenzie, I'm a probate investor, I’m interested in your property at 123 Main and I can really do a deal for you.” Sounds good. You run over to the courthouse to get the data and the first time that that executor is asked for the property address information is when he completes an inventory of the estate and he may not do that for thirty to ninety days out, so that information is not there. You think, “Well, maybe it’s in the will.” Well, keep in mind, only 20 percent of the people did a will and when they did the will, most of those people might have owned some property that they no longer own. So, getting that information, finding the exact, you know, the name of that property is not anywhere near as easy as people think. I take calls all the time. Well, that’s the only way I can work. That’s what I’m told I have to do. That’s not true. What we did when we first started, being IT guys, we turned around and took the names that we retrieved from the probate court, and then we ran them through the deed records, and, you know, we did this using automated tools. So, we had six hundred names and we ran it against the deed records. We got thirty thousand hits. Thirty thousand people that had similar names, you know, Bill and William and stuff like that and then we turned around and, what the heck, we’re good and we’re gonna go back and figure this problem out. So, we started analyzing it. Well, the only real piece of information that we had in the probate court data was the executor’s information. Now, if it was a spouse and they lived at the same address, that was a no-brainer but if they weren’t, then where do you go to get the information and how do you go to make it happen? We wrote software, we figured out how to knock off almost fifteen thousand, twenty thousand of those so that we were now down to ten thousand and then my son and I founded the company so we would get together on a Friday evening and we would work all day Saturday and we’d take those ten thousand names and we’d analyze them and look wherever we could and we’d run them down to probably another – to three hundred names or something like that and then that’s what we would make available. We did that for several years. Got many gray hairs, got tired, it was exhausting the whole exercise, and then it finally occurred to us – you know, we’ve been doing this for a long time and we have a lot of ideas and everything, but our ideas don’t come to us until we’ve been doing it for a couple of years. We’re a little slow at the process, slow on the uptake, but, anyway, we looked at it and then we thought, “Wait a second, what if we told the person that’s buying these leads, when you send your letter out, say, ‘I buy leads in Collin County.’” Well, we know the person passed in Collin County, so we know that that’s the – that he has a property in there, that executor knows what the property is. I mean, he has a good handle on it. Nobody has to tell him, “I want the property at 123 Main.”
Leon: And why research situations that are never going to bear any fruit? Why waste your time doing that? I see guys, they just spend all this time, “I’m gonna go down to the courthouse, I’m gonna research, I’m gonna think about this, I’m gonna have this packet built, and I’m gonna do it for all hundred probate properties, probates that I have,” when only two people are gonna call back or ten people are gonna call back and have an interest in talking with you? You know, something just doesn’t make sense there. So, our story changed. We learned enough about the process to be able to tell people, “Do it at the county level. When the guy calls, that’s when you wanna talk to him. Ask him where the property is, he’ll tell you, if he’s interested in work with you,” and then go from there. So, that’s one of the fallacies in working with probates. You really think, “Well, I can get any data, I can really narrow it down,” and it doesn’t really work that way. Somebody has to tell you where those properties are, and even today with systems becoming as sophisticated as they are and more and more data available, it’s still not a trivial process. You give me a hundred names and I’m sophisticated enough today that I might be able to go out and find fifty properties for fifty of those names. It would cost me money to be able to do that. Now I might have to go do skiptracing and I have to do a bunch of backend things, and instead of selling my leads at the price I sell them today, I have to triple the price or something like that. So, it’s something that most people just simply aren’t aware of and it’s a common sense thing and if you’ve been in the business a little bit, you really understand it, but finding that property information is a lot more difficult than what it is, but then again, you don’t need it. What you need is the contact. That’s what this business is, right? You want the contact, you wanna know somebody that does have some property, and then you wanna understand why he’s trying to do something with it and is it – we have a system set up to be able to help somebody do that. And with regard to systems, we do have trainings. We have books. We have – I’m fortunate enough today to work with both my son and daughter in the company. My son’s been with me – we’ve done, like I said, I’m an older fellow so I’ve started more companies than you can shake a stick at. I’m a serial entrepreneur. I just love that stuff. I really have fun going out and getting something going. This one was intended to be my, kinda my last hurrah and once we got into it fifteen years ago, if anybody told me it would take me fifteen years to figure this business out, I wasn’t too smart for that, it doesn’t make any sense, but it did take us fifteen years to figure this process out. It really did. My daughter, she’s the Dr. Gentry, she got her Ph.D. from Auburn. She comes to us with an anthropology degree and is bringing another set of eyes and experience and expertise to the company that we’ve long needed and she’s written a couple of books already and these will be hitting press in the not-too-distant future, and we’re really formalizing what we’re offering and how we’re offering. We work with Kent Clothier’s group for certification programs and we helped them build a probate certification program as part of their Real Estate Worldwide program, REWW, and we offer that and make that available on our site. We’re proud of that program, that’s a good one, and Kent has the thing that he does probably as well as most folks in this industry is he has another eight to ten types of certification programs that he makes available so all that’s available through the site. When people first come into this, there’s a certain hesitancy. I don’t think it’s that difficult. I mean, it really is fairly straightforward. You’re talking to an executor who has a piece of property and you wanna do something with it, but there are questions and, you know, you need to get those questions answered and we have the materials and the solutions to be able to help people to do that type of stuff.
Larry: That’s really good. That’s really good. Man, you know, Leon, you’ve covered the whole gamut. I’ve been on your website about the whole time we’ve been talking and this is really, really good stuff. I mean, you’re just – you’re reiterating everything that’s on your website here, man. You’ve got this stuff down, that’s for sure.
Leon: We appreciate it, thanks so much. Like I said, it took a long time but I honestly believe, before we got into it, the whole concept of probate investing, it was a murky area. There were some really – there were some claims being made about – the ones that we talked about earlier, send this letter to fifty people, come back to you, everybody wants to sell the property, they’re all gonna sell it to you for fifty cents on the dollar, I mean, these are people that own property. Why would they sell? They might sell it. They might have a situation they can do it. Everybody isn’t gonna be in that situation so it takes some real – we were fortunate. When we came in, we established a very ethical company, and we wanted to change the whole idea out there. And like I said, we worked, for years, on personal references. That was the only way we would sell. Today, we’re in all the major real estate magazines. We write articles for those guys and we do talk about probate. In the coming years, this whole area is just going to explode. I mean, there’s so much – so many new properties are gonna become available and the fellows that really understand this are going to be glad that they’re there, and I’m proud to say that we have solutions for them and ready to work with anybody that wants our help.
Larry: That is great, man. That is great. Well, you know what, I just literally started doing direct mail recently because, you know, I’m the HUD guy, I’ve been buying a lot of HUD houses and a lot of MLS, but even in the Carolinas, things have turned where, you know, you’ve gotta find other sources for properties. So, I’m ready to sign up and start buying some probate leads. I’ve got about five or six counties I wanna get the leads in. How does that sound?
Leon: I tell you what, that’s unexpected. I haven’t planned to make a sales call here. That’s pretty good. We’re ready to help.
Larry: Awesome, man. So, if somebody wants to reach out to you and they wanna get their county or multiple counties, what could they do to reach out to you?
Leon: USProbateLeads. We try to keep this simple. The name of the company is US Probate Leads so it’s just – the URL is USProbateLeads.com. Hit that website. It will ask you for the state that you’re interested in then the county and then we sell leads, you mentioned something earlier, we do have packages. A person could buy all the leads in the county. I mentioned earlier that we see about 250 leads or so in the Dallas county area.
Leon: Every county is gonna be a little different. LA, we see probably, six, seven hundred records. In Hays County, Texas, we’ll see fifteen records. So every county is gonna be a little different. We sell the leads in blocks, 25, 50, or 100, or 200, and then we sell all the leads and all the pricing’s right there on the website, nothing more than a couple button clicks and you can get the information. Something I failed to mention that I probably should have is when you’re first starting your program, let’s say you ordered a hundred leads, well, you’re taking the hundred leads, the current hundred leads, and that’s what’s coming to you so if you place an order today, then as soon as the data is available, we pull data once a month for every county, so as soon as the data is available for that county, we will send you your leads. But what we recommend is that you look back three months and pick up three months’ worth of historical data and what that does for you is when you start your first mailings, you now have four months’ worth of data and you’ve covered some of that time span that we talked about earlier so that you’ll have a much better chance of actually reaching those people. So the guys who really come in and get started right would typically look at a historical purchase and then – and probably all the leads, and probably multiple counties. If I was doing this and I wanted to get started in an area like yours, I think you’re right. Five, six counties makes a lot of sense. A lot of people can’t, you know, can’t go that direction and that’s just a little bit beyond them but I would definitely consider at a minimum a hundred leads and then I would try to get into it – to cover the specific area that I’m really, you know, interested in. The thing that I would be shooting for would be the name recognition and letting people – and publicizing myself as being the probate guy in my particular area, and there’s so many areas where that hasn’t been done yet, nobody’s really stepped up to claim that throne, and the guy that does that is the one that’s going to see business coming in the next twenty years, and that’s wide open.
Larry: Because we have an aging population.
Leon: We do, and there’s just gonna be a lot of properties changing hands.
Larry: That is for sure. And a hundred probate leads is 320 bucks to get you started and I think that’s a great place. I tell people they need to spend somewhere between $500 and $1,000 a month on their marketing and that would be great. Now, I have a question for you on the historical leads. Is there data available to be able to take out the ones that the properties have already been sold?
Leon: We do not keep track of what has been sold and what’s, you know, how the folks are working with those so the answer to that would be no.
Larry: Okay. I was just curious about that.
Leon: Yeah, that’s a good question, and, you know, if you were to buy from me, I would not expect you to send me, you know, your dealings and let me know what’s happening with those. I just make the data available as we have it. Haven’t been asked that question before but that is a good question.
Larry: That’s good. Alright, cool. Well, man, I really, really appreciate you being on today. It’s been a wealth of information. This is one of the longest podcasts I’ve done in a long time, but I know it’s gotta be my fault because I just kept asking more and more questions ’cause it’s such good stuff and really because I’m ready to get involved and I’m ready to get started. So, you know, as soon as we get offline here, we’re gonna get some stuff wrapped up. How about that?
Leon: That sounds good. I appreciate it. Once again, thanks so much for giving us the opportunity and we’re looking forward to working with any of the folks that do see this podcast. Thank you, folks. Thanks for tuning in.
Larry: Awesome. Thanks a lot, everybody.