Uncovering Off-Market Real Estate Deals: Strategies and Success Stories with Sharon Vornholt

"Hello and welcome back to another episode of the Collective Clicks podcast. This is your host Brandon Bateman, and today I'm going to be joined by Sharon Vornholt. Sharon is an expert in sourcing off-market deals through probate, and she's going to share with us today all kinds of different strategies that she has used to both find those leads and work those leads to create a scalable revenue channel.

"How are you doing today, Sharon?"

"I'm great. How are you doing, Brandon?"

"Doing fantastic, thank you. Where are you calling from?"

"I am from Louisville, Kentucky."

"Well, good for you. Awesome. Louisville, Kentucky - that's honestly something we don't hear that much. There are a lot of other places, but Louisville, Kentucky's underrepresented. For those that are listening that don't yet know you, your company, what you do, a little bit about your background, I would love to get the crash course on what you do and how you work with real estate investors, and what got you where you are today."

"Well, I started - I had another business in 1991, so I go back a long time with real estate, about 25 years. I had another business, a home inspection business, and an agent came in one day - an agent investor - and she said, 'Do you want to go to a REIA meeting?' And I said something like, 'What's a REIA meeting?' So I went to that meeting around about 1998, so like I said, it's been about 25 years. From then on, I just was immersed in the world of real estate investing."

"I started out doing a mix of fix and flip and buy and hold. So those were the two things I would do. Marketing was one thing I was always good at, and this is in the olden days, Brandon, when direct mail marketing was the biggest way to reach people, way before digital marketing. But fast forward, I went full-time in 2008. And if you were around in 2008, it was the best of worlds and the worst of worlds in real estate investing. So there were millions of deals, but not so many buyers could get a retail mortgage, and that was the first time I'd ever wholesaled a property.

I became what I like to say an accidental wholesaler because I did not want to hold those properties. I did not want to rehab the properties that I had because I didn't know how long they were going to sit on the market. So I just called an investor that I knew and said, 'You want to buy these couple of properties?' And he said, 'Heck yeah.' And I thought, 'Boy, that was easy.' But we both know being a wholesaler is not the easiest thing in the world, particularly if you're starting out.

So over the years, I just continued to do that, and I started the blog, I started a podcast, with the goal of teaching other people how to avoid some of the landmines and the roadblocks that I had come upon. So today, I'm really passionate about showing people this business, teaching them how to market and how to generate leads. And one of the many ways that you can generate leads - and I'm passionate about getting women into this business because I think they're greatly underrepresented in real estate investing."

"Yeah, I would absolutely agree with you on that. That's fantastic. I don't even know where to start in terms of picking your brain and understanding all this stuff. Obviously, the overlap that you and I have is marketing. We both love marketing. We both know that that's kind of where this business model begins, and arguably, it's like half of the business model for most real estate investors, right? Marketing and sales is pretty much the entirety of a wholesale operation, and then for different exit strategies, you bolt on other parts of the business that are necessary to make it run. So that considered, I would love to learn a little bit more about what it is that you're teaching in terms of marketing and how that interacts with what we do."

"I've always worked off-market deals, and it's probably because I just did not want to get in there and scrap around with a few thousand real estate agents and other investors on the MLS. So early on, as I said, direct mail marketing was an integral part of the other business that I had. So I got very good at reaching off-market sellers, and remember this was before digital marketing was ever a thought. So you combined that with - I still do, still believe direct mail marketing is the number one contact for niches like probates where it's a little bit different. But to layer that with digital marketing and all the things that can follow, you really get the explosion of the best of both worlds, I'll say that. So I don't think it's necessarily a one-prong approach, or I don't think it has to be one or the other. I think it's very much combined. I do think that you can get better results in doing what I do, which is reach off-market sellers, and particularly I love probates because sadly, there was an endless stream of leads. You can make your initial contact with them, and then you've got really a warm lead to follow up with digital marketing too. So I think it's kind of the best of both worlds personally."

"So tell me a little bit about - I mean, obviously there's a lot of people doing probate marketing. You've been doing this for a long time. I'd love to learn a little bit more about the process that you use for that. Like, where does the list come from? What have you tested in terms of the mail pieces you're using? Why is it that you say that direct mail is the best way to reach those people as opposed to, let's just say, cold calling or texting, which seemed to be really popular recently, or TV commercials or whatever the case is? I just love to understand a little bit more about that. And specifically, I mean, I'm assuming that most people listening to this have probably done some level of marketing to probate before."

"I don't think so. I think most people, most investors I have found, are not doing probates, and it's because of their own mindset. You see, in the probate process, somebody passes away, and then there are certain legal things that happen, like the personal representative is appointed, and then that property in the estate can be sold. But they're thinking that they're somehow going to have to deal with all this sadness and all of that, when in reality, if a house is in probate, it's got to be sold unless it's directly inherited. That property is going to be sold in order to close the estate.

So the family, the executor or the administrator - jointly called the personal representative - they have the business of settling the estate to take care of. There's - you have to get a federal tax ID number, it's a whole process. So it's not a matter of if they're going to sell the property, it's just a matter of when they're going to sell it. And most people will take care of that within the first year or two. They may not open the probate the first month or two somebody has passed away, it may take them six or eight months, but then once they open the probate, the clock starts ticking and they need to move forward with the process of selling this house.

Investors think, mistakenly, that there's going to be a huge amount of competition, and that's just not the case. Because if you think of - I don't know, where are you located, Brandon?"

"Salt Lake City, Utah."

"So, and if you are in a - depending on what your population is will depend on how many leads you have. And so you're comparatively - if you're doing deals on the MLS, however you're getting, doing that, you're going to have much less competition working any type of off-market deal. So that's number one.

Number two, you mentioned about the marketing piece and why don't you just cold call them or something like that. Because it's a very sensitive situation, and if Brandon cold calls a probate, 99% of them are going to put your name up on a wall and throw darts at it because you've just been insensitive to the fact that they've lost someone. They hate it when you cold call them as your first point of contact. Don't knock on their door, but use another form of marketing.

Now I know from doing this since 2008 that they have to go through a mental process themselves. They have to settle this estate, it's a required legal procedure if it's in probate. But they need to take a little time oftentimes to get this moving. And when you can send them a direct mail piece and then say, 'You know, here's what I do. I'll be here when you're ready,' they will get back with you.

Now, back to your point of digital marketing and the other contacts - once they have called you, even if they have said, 'I'm not quite ready to sell the property, but I'll be interested at some point,' then they've just opened up the door for other avenues of contact. Once they've called you, then you can generally speaking, you can call them, you can text them and check in, you can do other forms of digital marketing. But there is a process with this particular niche.

And with other types of off-market deals, let's say absentee owners or code violations, whatever, you can 100% cold call, you can 100% use digital marketing. This is a little bit different niche, which is what makes it so different.

Now you ask about getting the leads. In the U.S., there are over 3,300 counties, so there's no one central place for getting them like if you are a realtor, you've got the MLS. But you have to figure out where the leads can be gotten in your area. They're always going to be sourced locally. Now in my area, they're in the newspaper once a month. They're in the newspaper, they are not online in a portal where you can pull them. If you're in Dallas, if you're in Chicago, you can just go online and Google - you know, they're online. And so how you figure out if they're in your area, if they're online, is you would Google 'Salt Lake City' plus the plus sign 'probate,' your county and the plus sign 'probate,' and just see if they come up, if there's a portal where they come up.

They may be in the newspaper, which I know sounds really old school, but trust me, most people just quit right there. They're going to give up on these leads. And if you stop and think about it a minute, I don't know what your population is in Salt Lake City. So here we're like less than a million, maybe million-ish with the outlying counties. What are you, Brandon?"

"A little bit over 2 million."

"Okay, so let's say in your business, you have two million. If I'm getting - by the time we would sort through the leads and take out the ones we knew were too low, they were areas we didn't want, or the houses were simply too expensive, they were going to be sold on the MLS for sure - we would get between 60 and 100 leads a month, 120. In your area, that number would be probably about double that.

Now those are just leads this month. Guess what? Next month you're going to get the same amount, and the month after that you're going to get the same amount. So it is literally a never-ending stream of leads where you can build on this momentum month after month after month. You begin to build a list, and you've got this group of very valuable sellers because they have to sell the property. It's not a 'maybe one day I'll want to sell.' That's not the case."

"Yeah, and I think that takes - it also takes a certain level of patience. I actually had a call with a client a couple months ago where we were going through their leads and what they had in their pipeline and stuff like that, and they're like, 'Oh yeah, on this one we got into - or we got into contract, but it's a probate one so it doesn't really count,' because they were basically thinking like, 'Oh, it's not going to close for' - not true at all. And I looked at it like, okay, well, it's still worth something. You know, maybe those deals are a little bit slower on average, but do you have any metrics to represent cash conversion cycles in probate compared to other specific niches for off-market properties? I'm curious how it actually varies on average."

"Well, I think there - overall they're good leads. I can't give you any absolute conversion numbers, but I can tell you this: that these people - you say there is not going to close for a while. Well, if you look at many forms of marketing, whether it's direct mail or whatever it is, you have to have so many touches before people respond. With direct mail marketing, you'll get 81% of your deals - not your calls, but your deals - at or beyond the fifth month.

So once they've made their contact with you and you start to layer up your marketing efforts, then that number builds on there. So stop and think about this for a minute. You're building - if you've ever read the book 'The Compound Effect,' it's you do this this month, and then it builds on next month, and it builds on next month, till in a year you've got this fabulous machine built. And that's the way it is when you start the path with the - and start with direct mail marketing.

Every - after five months, everybody - somebody's going to be in the fifth month, they're going to be way more motivated. You likely will have spoken to them, you'll have other avenues like digital marketing to get in front of them. It's very hard, I have found, to convert a probate lead from like an ad. It's - I'm not going to say you can't do it, but you can do - often do it through your website if you're putting out marketing and then you have a probate page on your website. They're looking for some evidence that you actually know what you're doing.

So I think there's a point at which all of these different things come together and they - you know, they kind of marry each other. But I think you do need a little bit of patience, but once that machine gets built - everybody works on a different timeline too. There are people that open the estate next week, and in Kentucky, as with many, many states around the country, this is just a regular deal. That someone passes away, the estate is open, and boom, you can buy the property.

Because what happens next is that once that property is sold, the creditors are paid, then the heirs get what's left. Then and only then do people get what they're going to inherit. So they're very motivated to keep this process moving along. Now people mistakenly think the estate has to be closed, and that's when you buy the property. But guess what? It's all over then. So it's roughly as soon as they open the estate, you know, within a very short period of time you can buy the property."

"Yeah, that's super interesting. And very interesting statistic that you shared - 81% of the deals will close five months or longer after the mail is sent, as I understand that."

"No, they'll be gotten - that like the contract will be signed. So 81% of your deals, you'll get the contract at that fifth month or beyond."

"Oh, really? The contract, not even the deal. So that that even extends it further."

"Here, no, here it's a regular closing, and for an investor, it's next week or two weeks. It's the same as any other deal. Now if you're in the state of California, God bless you, because they have a lot of different rules, appraisals and things like that. But if you're in most states around the country, just think of it as a regular deal, a regular off-market deal. The triggering event is when the probate is opened, and that's when those people are raising their hands and they're saying, 'I'm ready to sell the property. We're ready to move this process forward.'

Now as I said, it might take them a couple of months because they've got to deal with things like belongings in the house and things like that. But there - that's the triggering event when they open the estate."

"Very interesting. And if it's not too much to ask, where did those - I'm curious where that number came from. Is that just direct mail as a whole, as referenced in the industry more generally, or is that specific to some of your own marketing that you've done?"

"It was - it was a statistic put out by the Sales and Marketing Council, and it was directly attributed to real estate as well as other things. Direct mail seems to be pretty much across all genres a pretty steady statistic. And it's curious to think in this age of digital marketing that people are not doing an either/or, they're - they're finding a way to marry the two together because it makes them so much more powerful.

As I said, these people, they've been through a hard time, but they've got this job to do. They've got this estate to settle. But the last thing they want you to do is cold call them or knock on their door. That they think is really insensitive. So don't do that."

"Yes, understood. I've heard the same about the divorce list. You don't want to cold call those people. It doesn't end super well."

"Yeah, although you can. It's just - you can, but yeah, there are better ways."

"Fair enough. And I'm curious on that - sorry for digging maybe even a little bit too deep into this. I'm really curious to hear - so when it comes to cold calling probate lists instead of direct mail, obviously it's a little bit more sensitive to do the direct mail, and you'd probably get less angry hang-ups and stuff like that. But do you have any data available as to the relative effectiveness of either one? Because what I've heard, for example, when it comes to like cold calling the divorce list, you're gonna have a lot of nasty conversations, but you'll still do deals. It's still worth it. People just aren't happy about it sometimes. How do you feel about that?"

"Here's my take on it. Real estate and in general real estate investing, it's a relationship business. And if you start off trying to build a relationship by hurting someone, doing something hurtful to them - and cold calling somebody who's just buried their relative is hurtful to them - to say, 'Hey, I want to buy that property that's become available.' What you're saying - what they're hearing is, 'I want to buy your mom's property' or 'your dad's property. They passed away and I want to get first in line and grab up their property.' They conjure up these things in their mind, but that's what they're hearing. They're not hearing, 'I'm a helpful resource,' which you can convey in better ways.

Now, people - I have students that have tried cold calling them. I've tried everything. It did not end well, and they've tried it, and they'll come back and they'll confess. It's really funny. They'll come back and they'll confess, 'I didn't listen. I cold called them. I thought I was in the area. I knocked on the door. They called me names I can't repeat.' And so - but for me, it's just not worth it. It's - I know that I know that the other approach works, and I know that the best mail piece that works - if you're going to do direct mail and then combine that with digital marketing - the best initial mail piece to use is a white computer-generated mail merge letter.

They don't want to get a postcard and look at it. It says, 'This is about the estate of your dad,' and this got his name on it. They're offended by that. So if you said - they don't necessarily - they - I mean, you got to stop and think, get into the mindset of these people, what they've been through. And that's part of the beauty of probates is that you can - if you can understand how they feel and put that - your marketing into a format that they can deal with, they're much more likely to choose you.

Because remember, marketing is how you get leads, but branding is why they choose you. So this is kind of a case of branding yourself poorly in their mind because you were not - you didn't really focus on the situation that they're in, if that makes sense to you.

So if you use a letter that says, 'Dear Brandon, I'm contacting you about the estate of' and the person's name, and here's the address, and then you say, 'This is what we do, this is how we can help you.' If one of your hang-ups is cleaning out the property - take what you want, leave the rest, and we'll take care of it for you. Because that's a very painful thing for a lot of people to do, to get rid of their dad's possessions that have no monetary value.

Once they've taken what they want, then they've got to deal with, 'I've got to throw away my dad's stuff.' It's an emotional thing for them. So if you can take that off the plate, figure that in your offer - somebody to come clean out the house - then you take that off the plate. That's often the stumbling block for them just saying, 'Here, you can have the property.'

So - but it - but again, if this is very - it's a different niche in that there are feelings involved. We're real genuine feelings involved. But it's a great lead source though."

"Yeah, I get it. But while you could generate leads with the wrong kind of branding, it'd be much harder to close those leads than if you can kind of speak to them the way that they want to be spoken to, especially because this could be like a slow relationship at first where like, it's not the right time when they first get your first mail piece, but it's going to take - it's going to take a continual exposure.

"What about situations where you've seen that this type of marketing to probate lists hasn't been successful? Like certain types of markets, certain states that have different laws, maybe just depend on the size of the market, or could it depend on competition? I'm just curious about the negatives that you've seen and any patterns you're able to track as to like, this is when this is a good idea, and this is when it's not."

"I think - I don't think it's ever a bad idea. I think because they're - the leads are sourced differently in areas. If you're in certain part - like I said, California has a lot of different rules. They will get the court involved as far as they'll get the property appraised, they'll do all of these crazy things, and maybe they'll just look at the tax assessor site and say, 'Well, it says it's worth two million dollars. We'll just call it 2 million,' when maybe it hasn't been updated in 35 years.

If you - so that's one area that I know people told me time and time again it's harder to do probates. It's definitely not impossible, but people - you have to learn what the rules are in your state. Now, ninety percent of the things will be the same, the process will be the same, but getting the leads - if you're in certain places in Florida, I had a student in Fort Lauderdale, he had to go to the courthouse. Well, that's totally not scalable unless you can get someone to do that for you, to go pull those leads. If you're in New Jersey, same thing.

So that's when I said if they're online - and they are online in a lot of places - you can pull the list completely free. You can get paid leads from some companies. I've not always been a fan because they often pull information from obituaries, which is just the deceased name, and then they'll find the address of the property. It's not really a good marketing strategy to send mail pieces to the property of someone who's deceased because no one else lives there in most cases unless it's a spouse. So it's a very poor use of resources.

And if somebody says to you, 'Oh, these leads are so fresh we don't have all the information,' that means they're working obituaries. Now there are some places that have the - you can buy the leads, they're super expensive. I mean super expensive. So if you can get them in your area, if there's a way for them to be pulled out online, then even a lot of the programs people are familiar with to get off-market leads and do different types of marketing too, you know, you - they - you can get them through list serve services. But that's not the case in many areas.

So I would say the downside is generally if you're in an area where the leads are hard to source and not scalable. Not scalable - it needs to be scalable."

"Yeah, yeah, I understand. Although I would assume - I don't - I mean, this is just a hypothesis. Maybe you have data to support this, maybe not, and maybe you do, but it's anecdotal. But I would assume those places where you have to like go to the courthouse and pull those records or something, they're harder to get, but when you get them, it's - they are significantly less competitive versus like a market that's maybe huge and it's all online and all of your competition has the same leads."

"Exactly. So there are - people I've had that I've worked with that did that, and what they would do was they would create a process. These are the - you really only need four pieces of information to work with probates, and that's the name and address of the deceased and the name and address of the personal representative. And then from there, you would hope to get, you know, email addresses and other ways that you could, you know, have a way to reach them online. But you only need those four pieces of information.

And the people that I have seen do this successfully, they have created the process like go to the courthouse, this is how you get the records for the month of May 2023. And then once they had their process down, then they would hire someone - much more affordable person - that would be their job to go once a week or once a month, whenever the leads were put out, and pull that information.

But you've got that 100% right. And another reason probates are such a great niche is most people, they just - they're looking for the Easy Button, Brandon. They're not willing to do even a little bit of work that's not push button to get these leads. And once you realize that these people really need to sell their property and there's very little competition compared to on the MLS, the difference is huge. I mean, two handfuls of competitors.

The other statistic is that 90% of your perceived competition will quit a direct mail only before the third mailing. So stick it out for the - you know, they come in and they don't make a million dollars in the first two months. They don't understand how this works. They don't understand how to combine digital marketing with, you know, how to contact them once they've made that initial call to them. That opens the door for other forms of communication, and you can also say to them, 'Is it okay if I do X, Y, and Z kind of keep in touch with you?' And most people, they live in a digital world and they're okay with that."

"Yeah, I understand. That is really neat and kind of exactly like I expected. On the topic of scalability, I don't know if you know Jason Lewis by any chance. He's a real estate investor here in Utah. He's a friend of mine, and he has a company called Investor Machine that is kind of like a done-for-you direct mail service. And so they're - they're of course targeting all kinds of lists with all kinds of postcards or letters or whatever the case is. And I know for a fact that in many of the markets that they're in, they actually like - they as the agency will hire people to go to the courthouse and pull records like this for their company. So it's like - I don't know, I almost - I get what you're saying by not scalable, but at the same time, like most things are somehow scalable as long as they can happen. It's just - it's like difficult to scale, which I'm sure is what you'd mean to say."

"Yeah, it's just harder to pull off. And stop and think about if you're in a big area like Chicago. A couple of years ago when the population was 8 million - is bigger than that now - they had 800 leads a month. Stop and think about that, how many leads that is in one month. So you would take your little area that you work in and you would just work those leads. And remember, your competition, when it comes to this type of marketing, they're not really your competition. Most of them are gonna - they're not going to get started to begin with, and secondly, they're going to give up when they're not a millionaire in two or three months.

So you're building this pipeline of leads and - now I've worked off-market deals for a long time, and this is really the only niche that I haven't found that postcards are effective with. You know, most other off-market deals, I think hands down postcards are as effective as letters. You know, you can mix it up, you can do whatever. But yeah, so I think you're 100% right. If you're willing to put the work into it, you can scale this. You can set up a process, have someone else do it, and then you focus on doing what you do best, which is probably talking to people, closing deals, whatever your - whatever your superpower is."

"Yeah, that's fantastic. Well, thank you for the different perspective, Sharon. It's awesome to hear a little bit about another niche form of marketing because we talk so much just about the specific channels that I'm most familiar with on this podcast. For anybody that's listening and this resonated well with - that might want to get a hold of you, what's the best way for them to get in contact?"

"Probably the best way is to go over to the blog. There's a link off of there to the podcast, and I talk a lot about probates and marketing. Those are some of the things I talk about. But the Louisville Gals Real Estate Blog, and then there's a link off to the podcast, which is 'Let's Talk Real Estate Investing.'"

"Okay, fantastic. As I understand, a very successful podcast. You're what, 400 something?"

"Four hundred and..."

"Congratulations on that."

"Well, that's fantastic. Sharon, thank you for sharing your time with me today."

"And for everybody else listening, I'll see you next time."

That concludes the entire transcript with all grammatical corrections, proper capitalization, punctuation, and dialogue formatting applied.

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