Show Summary

Are you using probate leads in your real estate investing business? Probate leads are some of the most sought after leads you can get, but they’re not that easy to get to…and your time is much better spent doing anything other than combing through county records. Even most that get the leads treat them all wrong. Leon McKenzie of US Probate Leads joins us today to talk all about Probates, and how to properly use them in you real estate investing business.

Highlights of this show

  • Meet Leon McKenzie, founder of US Probate Leads.
  • Learn more about what Probate means, and why these are some of the best leads out there for real estate investors.
  • Join the conversation on the right and wrong way to mail to probate leads, and how to be a problem for those dealing with probates.

Resources and Links from this show:

Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Mike: Hey, it’s Mike Hambright from Welcome back for another exciting Expert Interview, where I interview awesome guests in the real estate investing industry to help you learn and grow.
Just another reminder of the REI Power Summit that’s coming up. It’s a very large online real estate investing event, 100% virtual so you can watch it from anywhere, you can join us from anywhere. And if you miss any of the presentations as they happen, you get access for 12 months. So you can watch it anytime. We have over 50 great speakers so far and lots of great vendors that can help you in your business as well. So check out
For today’s show, I’m joined by Leon McKenzie. He’s the founder of U.S Probate Leads. It’s not a secret that probate leads are some of the best leads you can find for real estate. And it’s also not a secret that’s it’s a huge pain in the butt to get the data because most real estate investors have to spend their personal time to go to the county courthouse and manually pull data themselves, which as a professional investor that’s probably not something you want to spend your time doing
There are a lot of myths and misinformation about probates, and Leon is probably the leading expert in the industry on probates, and today he’s going to tell us all about probate leads.
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Hey Leon. Welcome to the show.
Leon: Well, thank you Mike. I appreciate it.
Mike: Yeah, good to see you. Before we get started here, I know probates is an interesting topic. A lot of investors some people either spend their time digging through county records, and I know that has varying levels of difficulty depending on where you’re located at. Or some people say, “Well, I’d really like to do it but it’s just not worth the effort for me to have to go do it,” or they’ve tried to hire people to go pull them and had mixed results and stuff like that. So I’m excited to talk about this.
Before we get started though why don’t you tell us, because I know this isn’t something you’ve done your whole life and you fell into this. But tell us what you did prior to starting U.S Probate Leads and how you found your way there?
Leon: Sure. I’d be happy to. I’ve done a lot of work in major industry. I worked with everybody from AT&T. I started out in the aerospace industry and ended up with AT&T, IBM, folks like that. I used to be a senior project manager. My role typically would be to go in and work very large projects for somebody who was having some kind of issues and help those fellows pull it together.
I did that for probably 20, 25 years. A lot of traveling, a lot of miles on the airplane, a lot of stuff like that, and managed to put a little bit of money aside. Got to looking at real estate investing like folks do in that particular situation, and spent a couple of years working as a real estate investor, trying to understand what was going on, background work while I was doing my full time job.
And ran across the whole concept of probates probably about 10 to 12 years ago. There was some folks that ran a big summit here in town and advertising in several different papers. And the opportunity was there to go out and learn what probated investing was.
Being a Baby Boomer myself it just made sense to start looking at something like that. I knew that properties that are in an estate are going to be the next wave of properties that somebody is going to be looking at. I decided I’d go ahead and check it out, see what [inaudible 00:05:00] really there.
I was working with my son at the time, Michael McKenzie, and together we decided to put together a company to actually work in this space, and the rest is history. We’ve been very excited about it, done a lot of work with it, learned a lot about it and it’s been a great experience for us.
Mike: Yeah. That’s awesome. It’s interesting because my background, I came from the corporate world as well and you probably saw the same thing I did. And I think there’s a lot of people that come into real estate investing from other industries and you’d agree this has changed a lot in the past couple of years, where it was and it’s still a Wild West, but there’s so many inefficiencies in this industry that wherever you came from you’re like, “Wow. Why does somebody do this?”
I still feel there’s a lot of that going on. That’s a part of why we created FlipNerd. It’s just like the kind of technology space and social aspect of the online business and real estate investing have never really fully collided like a lot of other industries I guess.
Leon: When we first got into this I did a lot of IT work as a project manager. I was very comfortable in that space, and the natural thought was when I heard the people talking about what they were doing, and I was hearing the same exact thing you’re talking about. They were sending folks over to the courthouse and actually the pitch that was given at that time was, “Sign up with me, you go over to the courthouse, collect the data, send it to me. And then I’m going to gather from all these people and then we’re all going to make some money on it.” And I said thinking, “Well, something’s wrong with that picture.” It sounds like it’s going to take a lot of time, just exactly like you started the interview with.
We’d been down to the courthouse, spent our time down there, and it was exactly that. I mean, what a pain. It really was a chore to go in there and try to get this information out. And we hit a number of different courthouses so that we could get a feel for what was going on. We tried it in a couple of different states and we found the amount of information that was available to us really differed by the state and the difficulty in getting the data was really something special. Sometimes it would be just next to impossible. Sometimes it was a little more straightforward. But it always involved quite a bit of work.
When I went into this, I thought I was putting together an IT program. There was no doubt in my mind. Obviously, I was a pretty smart guy, a young fellow. Ten years ago I was a little younger anyway. I got to looking at that and I thought, “Wow. I’ll just turn around and automate this entire process, and what we’ll do is we’ll push a button, data will come in from all these courthouses out there. That’s 3,100 counties. What a neat way to go.”
We put it together, worked it for about three months and learned pretty quick why it wasn’t happening. It turns out when you go into these courthouses that typically the person who’s in charge of the courthouse is probably a grandmother, she’s been there probably 30, 40 years. She has absolutely no intention of giving her data away and it’s all in files. And the only way it’s going to be gotten out by anybody is somebody is going to have to come in and sift through that data.
Long and short of it, we were sitting down there about three months and we figure that I started hiring people to help me pick up data and things like that. Lo and behold today 10 years later, we probably are in maybe 1,500 counties. We have probably 300 or 400 researchers that work with us going into these counties. We’re always adding new researchers, always adding new counties. We have a lot of the major metroplex areas. But it’s a far cry from the program that I thought I was putting together [inaudible 00:0:39] worked out that way.
Mike: Yeah. Some of the challenges that make this there’s a lot of things like this in real estate where I would say you weed out a lot of your competition because a lot of them aren’t willing to put in the work they need to get something out it. So this is a perfect example, right? It’s not as easy as just somebody emailing you a whole bunch of leads. Of course unless you work with somebody like your company U.S Probate Leads, but to go get it yourself it’s traditionally hard work.
So that weeds out a lot of people because of the crowd that think that real estate investing is easy. I just make a decision to do it and I’m driving a Rolls Royce now. But that’s some of the challenges. A lot of county courthouses, they really have no incentive to use technology to improve things here. A lot of the recording that happens is just something that they pretty much have to do
Leon: It’s the same way they did it. In most of these courthouses, especially if you get into some the smaller ones, an average number of records might be 15 to 30 records or something. It doesn’t take a lot of technology to be able to go out and support that, but the methodology that they used in 1950 is perfectly appropriate today as far as [inaudible 00:09:50]. Why learn anything new? Granted, there may be a computer terminal over there somewhere but most of these folks probably don’t have a clue as to how to use the thing. And we run into some good people.
Mike: Oh sure. I understand. They have no real incentive to optimize [inaudible 00:10:08].
Leon: They don’t, and so there’re not going to. But the other side of it is somebody like us that goes in and picks that data up is a real godsend for most folks that try to get in into this business.
Mike: Yeah. Let’s take it from the top and just tell us the obvious. What is a probate and what starts that opportunity?
Leon: Well, the concept is someone has passed away and when that person passed away they owned properties, and that might be personal properties, it might be residential real estate, it might be businesses, anything that that individual owned is now going to be passed onto someone else or to other people. The way that it’s done is through the creation of an estate, and in order to manage that estate there is appointed an executor and that executor has the full authority to be able to sell items within that estate.
Now, what he’s going to do, his job essentially is to turn around and take all the items that are in the estate and come up with a plan to distribute any proceeds from those items or the items themselves in an equitable manner to all the heirs that are actually entitled to something in the estate.
Sometime that’s done via will. Most often it’s not. Actually only about 20% of the people that pass away will have a will. So the majority of the folks that are involved in processes like this are going to be falling under some kind of state guidelines as to how they’re going to distribute the information.
But for a real estate investor what happens, the reason that a real estate investor would be interested in this is that at some point in time that individual who’s managing that estate may decide he has to sell a residence that’s in the estate, or multiple residences if they happen to be available consequently. And he may be in such a situation that he has to sell it quickly. What happens is that executor is responsible for paying all the bills that the estate is incurring, and that could be anything from lawn maintenance to taxes to just basically water, utilities or anything else.
So he’s got [inaudible 00:12:21] and at some point in time he’s going to look at it and if the estate was equity rich and cash poor and there was not enough cash in that estate to handle all those expenses, at some point in time that executor as a person who’s in charge of that estate is going to have to dip into his personal funds to start making those payments. That is what you call a motivated seller.
It may take him a while to figure that out, but once he starts to see that and he starts to see, “Wait a second. This isn’t exactly what I thought I was getting involved with” then there are some great opportunities for real estate investors. The trick is just simply to be there at the point in time when that person’s ready, when he discovers that he needs to sell properties and be there to be able to make an offer to him.
Mike: Right. I don’t know if you know a precise percentage, but what’s your gut feel on so you said about 20% of the time people have a will. Now, as a real estate investor there’s nobody that’s probably learned the importance of having a will for your family and your estate than a real estate investor, because you see families torn apart or six kids inherit a house and none of them can decide on anything and it’s just a mess.
So for anybody listening to this, make sure you have a will in place or you’re going to drive your family nuts at some point. But what’s your guess on what percentage of the executors are a family member versus a non-family member?
Leon: I would say it’s probably 65% would be a family member, and then probably 15% would be attorneys and the rest would be friends of the [inaudible 00:13:55].
Mike: Yeah. That’s interesting. If you say 65% are family members, I guess a big percent of that time it’s probably the person’s spouse that passed away. Just because somebody passed away doesn’t necessarily mean they’re going to sell their house. It’s just like, well, the other spouse is going to continue to live there at some point. Is that true?
Leon: Well, what you’re going to find in those situations is that I think the initial thought of a spouse is going to be, “Enough has happened to me. I want to stay where I am.” Check with that person in three months, six months. That will be a different story. We recommend everyone that is dealing with probates to set up a drip marketing campaign.
The thing about working with probates is no one knows when that individual is going to be ready to sell their property. It’s just something that is case specific and you just don’t really have an idea of when that’s going to happen. So what you want to do is when you get your list, whether you go down and get it yourself or you pick it up from a service like ours. You go ahead and get that mailing ready, send your mailing list out, send a mailing after those folks and then repeat that probably six to eight weeks later and then months 3, 5, 7 and 12. Something like that.
We generally recommend that people do four to five mailings during the course of the year. The fellow that does that and stays with it and gets new leads each month, and the key to this is obviously getting new leads each month, is the one that’s going to be successful with this, because he’s always going to have people in his pipeline that have been in the probate process for some period of time, and different periods of time.
You’re sitting out there six months and that guy that has been somebody in there six months but you’ve also got somebody that just went into probates, so you have somebody that’s [inaudible 00:15:43] month.
And once again who knows when that person is going to be ready to sell. Sometimes the guy is ready immediately, sometimes it may not be for a full year. You just don’t know. But the guys that stick with it, those are my customers, those are the fellows that have been at this for a long time, they understand this isn’t a get rich quick scheme. It’s a system that you put together and if you manage it properly you’re going to do very well with it.
Mike: Yeah. We talk about that on the show all the time, the importance of consistently advertising and one analogy that I just used either in the last show or the last couple of shows we did. So this could be repetitive for those of you that listen to all the shows. But like mattresses and tires, you get ads all the time but you’re oblivious to it until you need it, until you need tires.
Nobody thinks everyday about, “Well, I’m going to get some new tires in about 18 months.” You think about them the day you need them. You’ve got a flat tire or you realized how bald they are or you didn’t pass your state inspection or whatever. You’re like, “today is the day. Well, we got a flyer so here we go.” So I think the key is just being there, a recency issue of being there, marketing to that person when the decision comes even if they make that later on down the road.
Leon: I’ve seen that. I’ve seen real neat trick that follows along the same thought process, and the concept is when you send your mailing out to these folks put in a prominent place on that mailing, “Put this with your important papers.” And you stop to think about it and what are you really telling that person. Just save it. And it’s amazing. Six months, a year, 18 months later somebody will pick up a telephone and they’ll call and they’ll say, “I don’t know why this piece of paper happened to be with my papers here, but any way I need to sell my house. What can you do for me?” What a neat little trick, and what a neat concept and it works.
Mike: Yeah. So I know just from talking to you in the past that there are some parts of the country that’s it’s much, much harder to just walk into the county courthouse and get records than others. Is that true?
Leon: Yeah, and it’s getting harder in a lot of counties.
Mike: That’s non-verbal communication for those of you not watching the video. For those of you not watching the video you would have noticed this, but that was non-verbal communication, when I asked that questioned. You just gasped and you’re like yeah, it’s hard. I’m sorry. Go ahead Leon.
Leon: Getting probate information is tricky business. It really is. When I first went into it I assumed that since I was going to be doing it on a professional level, that I would go out and find myself some housewives, I found some college students, smart people that could go in and pick up the data. I just bombed with that approached. It just wasn’t the best way to do it.
Today we use predominantly paralegals and attorneys that go out and get that data for us. And the reason for it is the folks that do that type of work for a living have the proper mindset to be able to go in and deal with the bureaucracies that they have to face, all the issues of pulling information like this. And there’s a lot of things that go into this entire process. And a lot of time the folks that we use are people that really know the people in the courthouse. So they have the relationships already established.
And this is just like anything else. It’s a relationship business. The fellow that thinks, “Well, I’m just going to run down to the courthouse and get the data.” He’s probably going to be a little disappointed, and he’s going to spend a lot more time there than what he thought he would, and he’s going to be making errors and mistakes in trying to transfer the information that he’s copying.
It just makes sense to have somebody do it that knows what they’re doing. And so the trick is can you get it done at a reasonable price and does it make sense to you? And that why we put this business together.
Mike: Right. So talk about the difference between I know there’s some folks that mail and I don’t of it’s different on the information they gather at the courthouse. So for example, I know that some people are able to find records of if somebody passed away for example, which is different than a probate, but through the big list sources that you can buy, sometimes you could find whether somebody has recently passed away.
Now, I know one of the differences is that I think that they’re primarily getting the address of where the person lived, which isn’t necessarily where the decision maker is. I know the data that you provide, I believe you find the actual executor which generally is the decision maker. But just talk about different ways that people could market to them to where you’re getting to the decision maker or maybe you’ve identified the physical address where that person lived, which may or may not be where the decision maker lives I guess.
Leon: When you’re dealing with probates, the person that you want to talk to is the person who’s the executor of the estate. He is the decision maker. He has the authority to do something with it. Anyone else in that process is just not able to speak for that estate. So the real trick with this business is how do you find that person, and what do you do to get to him.
I’ve seen different techniques and approaches, obituaries and stuff and then try to backhand into some kind of information. Mostly it’s an attempt to get information without having to go do the dirty work that’s required to get into the courthouse and scrape up the data. That’s basically what it amounts to. So when somebody is offering some real cheap leads somewhere or another in this space, you generally assume that something like that probably took place.
It’s not a trivial process. It takes time and it takes somebody that knows what he’s doing to be able to go in and get it. That’s what we really put together is a system to be able to make that happen. So that decision maker, the executor, is the person that you really want to reach out to. And we spent a lot of time getting the correct information for that individual and that’s the hallmark of our entire service.
Mike: Yeah. Maybe take a second to talk about the idea of marketing. I guess a lot of real estate investors deal with this or new real estate investors. Some people don’t think about this but some do think about it, of not necessarily taking lightly that you are marketing to somebody that has just lost a loved one, and maybe talk about that issue as a real estate investor. On one hand you can say, “Well, I’m trying to help somebody deal with that issue.” On the other hand people are comparing you to an ambulance chaser or something. So maybe just share your thoughts on that.
Leon: When we first got into the business, if you’re going to go into this business that’s the first thing you think about, and being a good Christian, that was not our desire. We definitely did not want get involved or be perceived as folks that were in that type of situation. What we were seeing was a need, a real need, by somebody to be able to help another individual that was in a situation that they did not know how to handle.
I have unfortunately a little bit of background in this. I’ve lost three of my family members and there were four of us to start with. I’ve done this particular role several times and I remember when my father passed away years back, there I was, managing an estate. I had no clue what I was doing, and I had all the responsibility to be able to handle it. I remember at one point in time, he had happened to have a lot of woodworking tools, and he really understood woodworking and knew exactly what he was doing, had a nice workshop set up outside and everything.
So my brother and I, we turned around and we were going to we didn’t know anything about it. I hadn’t paid any attention to it. We were IT guys. IT guys don’t do woodwork. And we’re sitting out there looking at this workshop and we ran a garage sale, and we went out and we sold… oh man, we did well. This was years back, and as I recall we made about $10,000 on [inaudible 00:23:41]. We were doing good. Come to find out about five years later, we sold about $150,000 worth of tools for $10,000.
All we wanted to do was to get beyond that entire situation. We really wanted to just take the next step. And a lot of people that have lost a loved one are in that same exact position, and they don’t know exactly what to do. Now, working with real estate investors, those folks have the knowledge. They have the skills to come in and be able to help somebody. And in most cases the individual who is going to be selling the property is going to benefit from that exercise. We firmly believe that. I would have never gotten involved in this if I didn’t firmly believe that.
Mike: Yeah. I’ll give you a real time example. We just sold a house yesterday. So let me tell you that we bought from somebody that inherited it, but let me tell you the back story. We bought a house from her two or three years ago. Her father passed away and she had inherited two houses.
They were both rental houses. So one of them had tenants in it and then she had to go through the process of evicting the tenants because they stopped paying. She was an accidental landlord, didn’t want to deal with that, so she sold us that house. In fact that’s a rental property that we kept. We still have that house.
And the interesting thing is she decided to move into this other house, and lo and behold, around two years later she calls us and says, “I’m ready to sell the other house now. We’re moving somewhere else.” And this is the interesting thing, and this is what I love about real estate investing in terms of being a people business and building relationships, is we treated her so right at the time that even though she was using a realtor, buying a new house, the realtor, this is what she told us, “My realtor begged me to let her sell my other house but I just wanted to sell it to you guys because you treated me so fairly the first time.”
That’s an example of how we’re not preying on anybody. In fact, shame on us that we did a horrible job of following up with we’ve never done a great job of following up with sellers because it’s so infrequent that you buy more than one house from somebody. But she sought us out and came to find us two years later just because she had such a good experience the first time. Hopefully that helps.
Leon: Well, that’s the nature of the business that we’re in because we’re sending out a person that’s been with us for four or five years, they have a database now of people that were in that situation for four or five years. And if they did their mailings and possibly some of their follow-up, there’s nothing wrong with reaching out to somebody 24 months later, and just to see where exactly where they stand.
There are opportunities. When you stop and think about what an individual owns, it could be anything, and if you’re there and you have a way to help somebody then you’re going to be well received and people are going to respect that. The person that will be a little apprehensive is that individual who just lost somebody.
Let’s say I lost my brother yesterday and somebody picks up the telephone and says, “Hey, I’m interested in buying your property.” That was the wrong approach. That’s was just the wrong approach, and stuff like that has given our industry a bad name when you see things like that. But the folks that do this properly, they handle the drip marketing campaign, they send out a well-written letter and then they let the individual who has the issue reach back out to them. Those are the folks that establish a type of relationship that you need to be able to buy and sell anything.
Probates is just another way to buy and sell properties. As far as I’m concerned it’s the Cadillac of real estate sales, and it’s going to be even more so over the next 20 years or 30 years or something like that. There’s some awful lot of estates that are going to be created and there’s a lot of opportunity there for somebody to get in. And the people that get in now are going to understand how this whole system works.
Mike: Sure. You made that comment because of the Baby Boomers? Is that what you’re referring?
Leon: The Baby Boomer generation, yeah.
Mike: Well Leon, people that listen to my show heard me say this many times, that I’m a big believer in outsourcing a lot of stuff and I usually use this analogy. I don’t change my own oil, I don’t cut my own hair, I don’t mow my own lawn. I outsource a lot of stuff and I would never be the guy to go to the county courthouse and sift through records, and have to try to woo people with doughnuts or whatever it takes to get them to give me the information I’m looking for. I would prefer to just buy them from some place. So of course people can do all that.
A lot of newer investors that don’t have a lot of money may have to build some sweat equity for a while. But for those that are interested in effectively just buying lists of this data that is all ready to go, I know that’s what you do, so can you just take a minute or two and tell us about US Probate Leads and the service that you offer?
Leon: Yeah. Like I said, we’ve doing this for a long time. We’re in actually 48 states now, I think it’s closing in on 1,200 counties or something. As far as understanding this business, we’re the folks to go to for this type of work. We’ve come up with a pretty good sales model. We sell blocks [inaudible 00:29:00] you can 25, 50 or 100.
There’s a lead program in here for just about anybody. I will get somebody call me that’s just getting started and they decide that they want to go down to the courthouse. I’ll tell you what happens is three months later they call me back and say, “Boy. That was an exercise. I’ve got a little bit of money, let me come back and do some business with you.” That does happen.
We sell the 25, 50 or 100. We sell all the leads in the county and then we also sell historical data which would be the three prior months. A lot of people will go ahead and pick up the three prior months worth of data and then they’ll get an all leads subscription with the concept being, “Let me have data so that I have people that have been in the probate process for a number of months when I first reach out to them.” And that’s very good program for somebody to get started with in this space.
Mike: Well, for those that are interested in learning more, we’ll add a link down below the video to where you can learn more about U.S Probate Leads. Leon, we have just a couple of minutes left here. Any final words you want to share on probates or the general opportunity or anything we’ve talked about?
Leon: Well, I would like to mention that as I said, we’ve been doing it for quite a while and we’ve built the infrastructure necessary to make this happen. And the reason that I think we’re as good at this as we are is because of the people that we have brought on board to work with us. We recently brought on a vice-president of operations, Lynn Jackson, who is just a super lady. And if you happen to work with us you’re going to find yourself doing some work with her.
We have a new vice-president of sales, Lisa Lolina, who is exceptional. And both of these folks have been in the real estate industry for years and truly understand the entire real estate market and having worked with us now for a while really understand the probate market.
I think you’re going to find good people. You’re going to find people that take pride in what they’re doing and if you do work with us we’re going to make something happen for you and you’re going to be quite satisfied with everything that you’re seeing.
Mike: Awesome. Well, I was just talking to somebody earlier about what are the best leads to go after for real estate investing and it’s interesting how people ask that question. But my response is always there are some things that are better than others but you need to have lots of irons in the fire. And I think anybody that’s been doing this for any length of time has found a way to be using probate leads as part of their business. So I appreciate you sharing your information with us today Leon.
Leon: I appreciate it. Thanks so much for the opportunity.
Mike: And everybody thanks for joining us today. If you haven’t subscribed to the show consistently, especially the audio version, check us out on iTunes or Stitcher if you’re an Android user, and subscribe, leave us a rating. We’d appreciate it. We’ll see you on the next show. Thanks Leon.
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