Tax Changes and the Step Up In Basis: Motivating Sellers to Act Now | Changing Your Cold-Calling Mindset | Group Coaching #5

Preview thumbnail for session 5 of Probate Mastery Group Coaching with Chad Corbett

Tax Changes and the Step Up In Basis: Motivating Sellers to Act Now | + Changing Your Cold-Calling Mindset ep. #5

Please note that live participation in weekly group coaching is reserved for Certified Probate Experts (Probate Mastery course alumni).

Time Stamps (YouTube Links):

  • 00:00​ Introductions
  • 1:23​ Where is Mastery Going From Here?
  • 7:40​ How Rosie is Living Free After One Year of Probate Real Estate Investing
  • 11:31​ | 38:20​ When is a BPO needed vs. a CMA?
  • 12:06​ Win More Deals With The Right Approach
  • 20:36​ Tax Changes and Motivating Sellers To Act Now 1
  • 25:18​ Getting Out Of A Slump and Revitalizing Your Listing Pipeline
  • 29:54​ Change Your Cold-Calling Mindset
  • 39:37​ Tax Changes and Motivating Sellers To Act Now 2
  • 51:16​ Financing, Lines Of Credit, and Business Structuring
  • 54:47​ Eviction Moratoriums, Mortgage Payments, and Foreclosure Chaos
  • 1:03:37​ TCPA, DNC, and Cold-Calling Probate Real Estate Leads

Relevant Links:

  1. Estate Professionals Mastermind Group (Facebook):
  2. Chad Corbett’s YouTube Channel:
  3. Ringless Voicemail, Voice Courier, and Appointment-Setting Services with VoiceLogic’s probate-trained team:
  4. Penny Parker’s Estate Sale Group Strategy from session #4:



All right. So welcome everybody to the probate mastery group coaching call. We had a couple of really good calls and I’m curious to see what you guys think. I like the content.
We’re dealing with higher level stuff. So I really appreciate that.  Only students and all CPEs have access to these calls and then they’re recorded. And we actually did decide to put them out as a podcast that after we season them mainly. So you guys can have them on your phone.
Like the, if you guys want to chime in on that, if you think this is the right format, if you’re getting everything you want, you hope too from these calls   we’re here for you. Yeah, you can share your opinion. 
I like it Chad everything’s good. As far as how you guys have it set up right now, I think it’s perfect. Cool. Thanks Anton yep. Chad, I have a couple of questions for you. Yeah, go ahead.  So I just started the Mastery program yesterday.  And in that the Q and a section, you said you’re coming to bend Oregon.
I was just curious when you thought you might be heading here. Good question. I thought I would be out of Florida two months ago.  So I am actually, so Washington state is one of my favorite places on earth and I plan on being to Washington probably by the second week of July.  And I’ll be around bend probably around that.
I think I’m going to start around bridge of the gods. So I’ll go down the bend and the shoots and see that stuff. And then work my way North to the Canadian border. So probably mid July, I’ll be around your neck of the wood

Where is Mastery Going From Here?

[00:01:23]All right. And the second question any ideas or thoughts of when you’re going to finish the the new mastery class?
So here’s the deal, man. I see you guys as a community, so I’ll just be really transparent with you. I have a bigger vision for this of being Estate mastery. I’d like to have more John Frakers be part of the conversation, more attorneys to help us build that network and help them scale their law firms.
Just like us, they’re small business owners and just like us, there’s only so many hours in the day. So I think there’s a lot of value in the approach that we teach to real estate professionals with legal professionals. Now, as that fluid vision has taken shape, I keep thinking maybe I need to cast and even wider net.
So before I start building, I want absolute clarity on what I’m building because I don’t want to backtrack. And you guys would be like, what the hell is this guy doing? I want it to become bigger than me and autonomous on its own.
So it’s collectively our’s, right? And I just want to get that right. And I’m not really in analysis paralysis as much as I am considering widening the niche just a little bit to bring more brilliant minds and small business owners into it. So maybe the conversation isn’t just about real estate there’s things that happen in the financial services industry and the real estate, or excuse me the insurance industry that, where we can pull ideas and cross pollinate across many different disciplines following the same methodology.
So yeah. Rather than pull the trigger on such a tight niche community. I figure the more successful small business owners we have in the conversation, the more value we all get. So that’s just a really transparent look at where I’m at.
Like I haven’t started building the courses yet because I don’t exactly know who it’s for. And I’ve been sitting with this quite a bit for the last couple of weeks. I almost feel selfish just containing this and the real estate community because I know it can help. It can reach and help other small business owners scale.
And I know they can help us too, if we bring them into the conversation. So that’s. That’s maybe not the answer you expected, but that’s where we are with it. As I do podcasts and I coach a lot of folks just as a, just for value, not for money and just, people who are, well into seven figures in net worth.
And I always, I hang up from those calls and I’m like, man, I wish everyone, he could have heard that because none of us are immune to the struggle, man. I don’t care if you do have two commas on your balance sheet, like we have times where we need that help and we need advice. And you just want someone to tell you what to do.
And I have so many of those conversations offline that where I’m what my heart’s really saying. You need to bring those here. Like everybody needs to hear those. It might not even be in estate or a probate brand. It may be a wider net than that, where we just get.
Altruistic entrepreneurs who have reached a certain level that deserve to be part of the conversation and bring something to the table
thank you. What do you guys think about that? I’m open to feedback. I think I see where you’re going. I was in, in this a zoom this morning and one of the items.
The topics that we were discussed to get to BNI. And I’m a business networking international, and I guess one of the things they were saying that one of the biggest challenges is that we sometimes try to quote unquote, please everyone. And that’s where it almost becomes a disservice.
I hear what you’re saying. And actually I appreciate that a hundred percent. I’m just wondering if that net is cast too wide. If then all of a sudden it makes it a little more challenging for people that are focused just on a specific type of sector to actually get their value packed into that meeting.
Cause maybe it could just go in too much in a hurry and fed. I actually brought this up on our team call today. I use you as an example, I hadn’t hit the record button and you showed vulnerability and w we’re looking for some help through that. The advice I gave you is no different than the advice I gave to other guys that same week.
And it’s, they are developing real estate. They’re doing real estate syndications, like 144-A deals and private equity stuff. they’re running and, eight figure balance sheets, but they needed to hear the exact same thing. And that’s, there’s so many of those amazing people in my network, in my life that I think could bring value to you guys.
very altruistically. I hear you, but for me, I’m like, damn it. I know the conversations I have. And I know how much of those you guys don’t have exposure to. I’ll tell you, my goal is to move. You guys bounds above where you are now. It gets you into accredited investor status, get you access to those types of deals and those types of people.
And because the first million bucks in net worth, I came from nothing. I came from negative, nothing. And that first million bucks was hard as hell. But then once I broke through that, it was like fun and easy, right? Yeah. So I feel like that potentially this blended environment this is limited to entrepreneurs who have an altruistic outlook on business in general.
So they’re going to be doing things like divorce or poor foreclosure or probate or short sales, or, high level service. So more running, a more boutique business. And they think a little differently than the average individual. But I appreciate your feedback. I like, for me, I’m obviously.
Cautioning myself not to dilute the value here and make it too broad of a conversation. But I think there’s, especially attorneys and financial services, insurance, there’s people that we already have on our teams that we could get those people at the highest level in the country and bring them into this.
But thanks for your input. I think that in July, so I’m just gonna have one, one small part to, to piggyback on what you were saying. I think the huge value on w where you’re trying to package together is that yes. Essentially we all go through every transaction every situation is so different that we can really turn sponge mode on from anyone that you’re referring to, and really absorb a little bit from everyone, which then makes us greater as a whole overall.
Imagine if we had a very accomplished estate planning attorney and then high net worth attorneys and listen to those people, struggle and listened to their objections and we have to role-play through those and and we have to, anyways, I that’s kinda what I’m thinking. I haven’t really said that out loud.
I’ve been beating myself up for not moving forward on estate mastery yet. That’s why I like it.

How Rosie is Engineering More Profitable Real Estate Deals

[00:07:40]Rosie. Before you explode. We got it here. The floor is yours. Awesome. Okay. Thank you for that. Really good input, Chad. I have something to say.
So I joined probate last year, and I quite frankly joined probate because I was just tired off doing that package, retail listing buy sell. Because once you all will experience, I’m sure you already have probably a certain level of repetition of that transaction. Your intelligence is going to seek some challenge or some more usability and what’s the chat.
I will share this with you. This last year. I’m very proud to say that we have acquired over four rental properties. And my living in my property taxes are free so I can officially say I’m living free. My rent are paying for it and I couldn’t have done it. Had I not opened my mind up to help you become more usable as a realtor.
The code 90% of the training in the marketplace is about how to get number of listings under your belt. How to build a team, how to build, trust me. I went that route. I had ISIS for a year. I had to do it to no, that’s not me. And trust me. If anybody qualified for that ISU role where you could have built a big team.
I thought we were the ones because we started our business with prospecting and we have made over a million dollars in our career. What I’m trying to get to is that I would love those people who create syndicates. I would love to know who’s buying real estate on our outskirts. When I spoke to Earon, they’re buying up to $350 million worth of real estate anywhere in Austin.
Here’s why, because just two weeks ago, I had an opportunity to convert a $4,500 commission income to actually a $60 thousand dollars net worth equity in the property. I’m a rental that’s going to pay for the car. I would choose to buy. I’ll share this with you guys Rose any real estate. Lot of transactions.
We’ll give you a good topic. You will have good three, $400,000 coming to you, but I will tell you this, you would be the highest paid employee, unless you really figure it out. The skill I learned that was not my way. I’m more often investor lied. I’m okay with having short-sale conversation. I have the choices chats since last year and I have converted my own investors.
So the moment we remove ourselves out of the thinking that this kind of fed, if I had anybody had in it, I had issue with that. I sat in the room and I find me this real estate attorney who was helping all these investors just paint them, knock me out of my head. He said, you got to think outside the box.
I’ve never been told that in my life. I thought I was very young at the box thinker, but at somebody who was even more outside the box had to knock me out of my reality. So what’s wrong with becoming more useful to a person who’s getting their hour of their time. They trusted us already. I want to know if I can sell your property for top dollar.
You, not everybody wants. Sometimes we don’t get listings and everyone else because people don’t want to do the work to go in the market. I am selling to 15% of the market when I sell retail. But if I go investments, 85% of the transactions are happening off the market. Doesn’t matter how good of a realtor we become.
There’s still visibles. I want to be marketable to fisbos, to expires, to short sales, to probates. And that will happen by having access to those people who are needing us. If we understand they’re struggling and are struggling and we have an open communication about it, I’m sure there’s business to be done.
So appropriate attorneys looking for a realtor like us. And I’m looking for an attorney who can answer a simple question to move my ball forward. So that’s all. Thank you. You are one of my, I point to you more often than, I’ve really enjoyed watching you grow into this and seeing you want to grow more, the faster you grow. That seemed like the more you want to, and that’s we definitely need more and more of that in our culture and all you guys.
Everybody here is. These are all very familiar names.
So thank you guys for your input.

When is a BPO needed vs. a CMA?

[00:11:30]So Joyce, I wanted to know one of the bop needed versus a CMA. Okay, you’re on mute on our side, but we still can’t hear so the CMA or I prefer for a market absorption analysis, just because it gives you a little more of a three 60 view.
That’s good. Pre-listing in California where I think you are you have the BPO that the court will order as part of that process. So there’s, it’s a different tool at a different time. But think of the CMA as a way establish a value with the seller and think of a BPO is how you, you satisfy the valuation of a court.

Win More Deals With The Right Approach

[00:12:06] I’ve helped a couple of people put together their first deals this week and really impressed. They bought the course and within a week we were transaction engineering and putting a hundred thousand dollars in equity and one of them and the deal, and we actually doubled what the seller said.
She wanted, she got twice as much and we still had a hundred thousand dollars in meat on the bone. So if anybody wants to step up tell that first deal story. Cause some people in here just getting started and what was that first one? And how afraid were you like in anything? So anyway, sit with that.
Anybody who would want to share that stuff, fed what he got. I actually am. I’m in the middle of putting my first deal together. So I wanted to thank you guys to piggyback on what Rosie was saying. I think the fact that you guys teach us to not just be the usual realtor that has the same thing to offer that everyone else just the way you guys open our minds to not have one angle, not even have to, but have 12 angles to, I don’t even want to say the word attack cause we’re not attacking, but just to approach the situation from a, it makes it so much easier also mentally when reaching out to the, whoever we’re dealing with.
I finally got an appointment finally. But that’s also, I finally learned. How important the up is long story short. I went to the appointment on Saturday. And because of the angles that you guys teach, there was three people two sisters and a brother. I met with the two sisters at first, I was supposed to meet with all three.
The brother showed up an hour late. I waited for him and whereas the sisters were on board. The brother just gave me help. Like he started jabbing, but instead of jabbing back, just started mirroring him and saying, Hey, it sounds like you had a really bad experience. Obviously these things happen.
I would be, I would have the same reaction, I’d be annoyed to blah, blah, blah. And we just brought them down from this guy was coming hard. He was going for the knockout. And, but instead of just swinging back, just understanding and listening to what he was communicating, opposed to listening, to just answer So it looks like it’s going to go we haven’t signed anything yet.
I didn’t even want to introduce that day because he was that aggressive and he was saying, you guys are all the same and you guys were all trying to just screw us over and this. So I’m not going to say, Hey, I get it. I understand. But here sign away. I followed up with the sisters this morning.
It looks like they will move forward. But I did want to say that had it not been for what you guys teach and how you guys teach us to just have all these different approaches. I would have just been like a deer in headlights, just and or you would have been even worse. You would have been defensive.
Yeah. Yeah, for sure. Which is it’s it’s you showing weakness. A lot of people think that’s showing strength, but at that point it’s ego versus ego. Like you didn’t meet that guy. You met at ego and that’s what he was ready to show you because he was protecting himself from everyone else who he thought was going to take advantage of it.
And you did exactly the right thing. You don’t get defensive. You listen that you say, authentically listen to what he has to say. Let him blow off that negative energy. And the one thing I would say to you, if that is follow up with the sisters is good. Make sure you’re following up with him. And March right back into the lion’s den and be like, Hey man, I’m really glad that we talked last week.
Just hearing you get that off your chest really helps me know how never, how to really avoid ever making anyone feel the way someone made you feel. So at first, I want to thank you for that. And just an authentic compliment because you learned something like you’re telling us, go tell him too.
And thank him for that lesson and say, listen, having some time to process this, I know that, you were really uncertain then. Are there any, what questions do you have for me? And I’ve got some options whenever you’re ready. When would you want to look at those options and then just shut up?
And then you’re probably going to be talking to him. He’ll he will have put it there. He’ll, he will take in the archers off of the stone wall that is eat metaphorically ego. And those archers are who you met first and maybe he’ll drop the Drawbridge and actually let you into a real conversation.
Yeah. Yeah. So the, one of the sisters is the PR that was on the actual file. So we had her contact. And today, when I followed up with her, because I sent her a follow-up that night today said, Hey, by the way I’d love to, what’s the best email for sister’s name and brother’s name. I’d love to keep them in the loop.
So that, and then I mentioned his name, I said, so that, Brian under, fi doesn’t feel left out. I’d be more than happy to just, get on a conference, call with you guys again, or meet with you guys again that way everyone’s on the same page. And she actually, when I said that, ironically, she said, I think it’s really important for you to speak to Brian.
So to your point, Yep. And I want to point out to everybody else, just make this a teachable moment. Like you always, you will always hear me stress. You never go on an appointment without the decision makers and decision maker doesn’t mean the people that are on legal documents, it means the people with social leverage against each other.
So even though brother Brian was not a co-executor, he wasn’t the executor. You can see this is, he clearly has influence here. And he, all he has to do is rattle his saber and the sisters are like, Oh my God, you should talk to Brian about that. So he is the decision maker. He won’t be on the legal documents.
He won’t even sign the listing agreement, but he is the decision maker. And this is a really good. An example of why you never, and what happened with fed, like him being an hour late, that was out of your control, but you did the right thing and he showed up, right? Like a newer patient. You didn’t get frustrated.
But that, this is why, because you can get somebody who has had a bad experience with one of our competitor or competitors. One of those people who think they can do this effectively, and they have poisoned the well. And you have to do some work to actually get that person to trust that there is someone who’s altruistic that can actually be acting as a fiduciary for them, because that’s not what everyone else was looking for.
So this is a great example of why you don’t go on that appointment just to meet with one person and you give them permission to bring anyone into the conversation. I’ve had it be like second and third cousins that had a closer relationship with the parents than the kids had with their own damn parents.
And they were the decision makers, even though the kid was the executor. And, but it was the cousin that I had to get through to. And they like, and at the end, like they’re, I’m like, so here’s the blue pen and I’ll hand it to the cousin and they’ll give them the nod and slide the paper over. But I show them I recognize and acknowledge your authority.
You make the decision and then the paperwork goes across the table to the person who’s supposed to sign it. But anyway, that fed, I know you’ve learned that lesson, otherwise you wouldn’t have gotten the outcome you did, but I think for other people it’s a really good example of a real life example of that.
So thanks for sharing. Thank you. Now, what’s your play? What, how are you reconnecting with Brian? She she’s going to send me, I asked her to send me an email with both his contact information and the other sisters. What, the, one of the first things, cause I gave him three options. So she, when we first, when I first went there, what we discussed, as I said, look, I may already have someone wants to buy the house.
I said, now there’s options can whatever’s can most convenient for you. Obviously we want to net you the most amount. We could either go because on the phone I said, We could that we could either do a cash offer or standard sale or keep, so I just repeated those three points. I said, I have someone who’s willing to write up a cash offer close in five days, no contingencies, that’s option a option B we can explore and go on the ordinary markets, see what we get, these are the pros, these are the cons for each one, option three.
I added option three. When Brian started yelling and saying I’m going to keep this house by myself and I’m going to put this and I’m going to put, I said that’s actually option three. Option three is if you want to keep it I have, if you need help, whether it’s a contractor, landscaper, plumber, whatever I said, let me know.
I’d be more than happy to share my list of you. You can use whoever you feel comfortable with, but if you want, my list is free, you let me know. And that’s how we. That’s how that conversation went.

Tax Changes and Motivating Sellers To Act Now 1

[00:20:36] And so today, when I followed up with her she just said, Hey, do you think your buyer would give us this for the house?
I said, yeah, I’ll talk to him. And I’m sure we could figure something out. There’s always. So have you researched, what the market rent would be on it? Yes. Okay. So that’s a good way to reenter it and be like, Hey, listen, I think option one is X thousands of dollars X, hundreds of thousands. Option two is Y and option three would be X amount per month.
And over time. Now, when does the step up basis lock take effect? It’s already taken effect in California, December last December. Yeah. So if the family is interested in building long-term wealth, and if you want to earn a lifetime client. Here’s what you can dress up option three. And Brian, I really appreciate the candid conversation we had last week and it made me think.
What is the opposite? How can I treat you the opposite of the way the other people that made you feel that, that guarded and that armed when we first spoke and what I came up with is I looked and the market rent on this property is X amount per month. I think you have to put about Y and cap X into it to get it ready for, to be a rental, but long-term, I can see a lot of ways where that might serve your family best.
And here’s what I mean. As you may or may not know, the step-up basis was basically stolen from you. It’s a law that’s been in place for almost as long as this country has been, has been a country, but California politicians are desperate to, to fund their programs and they’ve taken the step up basis.
So when you sell this asset, you’re going to pay X amount in taxes, which is a considerable tax bill. The estate will have to settle. Now, if you were to not sell the property, And to actually, deed this into a trust and you and your sisters rent it, then here’s what that might look like. And actually take him that option three, but fully dressed up and flush out the financials and show him what it looks like to not actually sell it and to hold onto it as a long-term rental.
What’s likely to happen. It sounds like the sisters are looking for that cash price and they’re going to want to cash in. Now, if they take that, there’s still ways for you to indirectly monetize the deal. So you get them re you, you refer them to a property management. You might make a little bit here and there, like a few little, a few bucks.
That’s not the way is you then get them over to a community bank. One that understands CRE comer, a community bank, commercial finance division. You then put a home equity line of credit on the asset, like a business line of credit record a first against it and then go capital there.
They’re now capitalized. And then go sell them all rental houses and say, listen it’s harder to manage one than it is five because our management partner was vetted and they can, I don’t care if you have one or 500, you’ll get the same level of service. But as I told you, when I looked you in the eye, when you were ranting at me, I’m here to help your family.
So I can take the equity in this asset. Not lose half of it, the taxes, pyramid that up and help you guys build a family trust rental portfolio that will serve you and for generations to come. So something like that. So you might not get a commission on this deal, but when you go to that community lender and deliver a high net worth client and give them immediate business, the next time they’re meeting with a high net worth client, and they’re pissed off at their realtor, it’s Hey, you need me to call fed.
This guy is out there. He’s serving in a different level and you’ll start to do indirectly earn that business through trust. So really think through those options and be like, what is that? What are what does this look like? Option three. If he wants to go that route, I’m not worried about you costing yourself a commission that you’ve already worked so hard for because.
That in that scenario. And I’ll personally coach you through it. If needed, like you can see that one all the way through and create multiple transactions, or you can turn them into a private money lender and you can go borrow the equity from that to flip a house yourself. Like you can become the principal.
There’s a lot of different ways but show him how to retain generational wealth. And how does, how to grow that? I don’t know how the hell can he not respect you? No one else has showed him that not even his advisors. And I was going to add to the layman’s term, everything going on in the real estate market.
And I bet it’s 10 times more exacerbated in California right now, but you take the stepped up basis and explain capital gains taxes and how that pairs with the rising cost of housing right now and what that means for their inherited property, if they choose to sell it, that’s relatable.
Everybody understands that house prices are through the roof but now you seem like, you know, something that they didn’t even think about, yeah. Anton, you can just jump in, man. Just unmute yourself. You don’t have to raise your hand.

Getting Out Of A Slump and Revitalizing Your Listing Pipeline

[00:25:18]Sorry. I didn’t want to jump in front I can wait until they’re done. Yeah, I’ll wait to raise my hand either.
All right. We’ll deal with yours first. You’ve been patiently waiting. Okay. I S I started last year also. And couple of months in I did get three deals bang. So I was really happy about that. They all called me after sending letters, but it, since then this year tigers, I have a dog doggone thing.
I’m very disappointed. I keep sending letters out. I’ve developed some postcards, and then I people I do get on the phone are very hateful to me. Don’t call, I had one message me back and say, don’t ever call me again. And then it’s really hard to get anybody on the phone and reminders, what market you’re in.
Texas, she said texts. Think market. Okay. I know at one time you told us, how to, what to say on leaving a voicemail, because I don’t let them know that I am a real estate agent or, what company I’m with. I just tell them that I’ve been sending them letters over the past several months.
And then I am helping people who are going through probate. They make their life a little bit more stress-free, give me a call. I can help you in need by number. But I’m trying to figure out something else when I get on the phone with them, what offer? Because the personal property is lawn care and their maintenance just as that working.
So I’m looking at some other things. Cause I did purchase that executors guidebook, and I looking in there you’ve got to, what are you going to do with the social media accounts? What are you going to do with the emails? Things like that. Maybe go that route. The other thing is I’m going to tell Rosie.
I saw her video last year. I was trying to find it again. I was very impressed with it then. So I wanted to talk to her. She’s open to do that.
Yes, definitely. We’ll connect. I just direct message to you and I will send you my number and we’ll chat. Okay, great. We’ll go out. We’ll connect after this. Thank you. Yeah. And a couple of ideas. I don’t think you’ve been on. Is this is your first call or were you on? Oh, I did. Yeah, I’ve been on it before.
I was on a one time for probate mastery, my first call, but I’ve been on your other calls. Yeah. want to I’ll point you we did record last week and I think the week before, maybe last week, it was the first anyways some ideas that like new ideas that come out one really good idea was actually start a Facebook group and your community for a state sales.
So it’s kinda like you’ll see yard, sale groups and communities. And that was shared with us by Yeah, penny and her mom, her mother owns an estate sale company and that’s where she thought, Oh I’ll just use this Facebook group. So she’s actually connecting with them on one of the first problems that people will admit that they have and start to deal with is dealing with the personal property.
I know you said you’re coming up short there, but this is a different approach, right? So if you could you provide a community resource for those families? The other thing is actually providing a weekly community resource for a group. So just like here, once a week, we come here and we talk about a specific topic of conversation.
So if you can get the vendors on your team, the attorney, the CPA, the, the financial services professional, what if they show up once a week? And you change your marketing campaign and you drive them to a probate information call. So you’re not asking them to do anything that you’re saying here, I’m leading with value.
These are, this is, a team of professionals that every Tuesday at whatever time, or, whenever it’s probably like a Wednesday afternoon at five 30 or whatever works for your team, but what if you actually. Started the conversation by offering them a look at what a team looks like on zoom, where they can actually see them and ask questions.
So that’s just a couple of ideas we’ve discussed recently, like more out of the box, thinking where in these really highly competitive markets can really set you apart. And most people aren’t going to be willing to put themselves out there, especially on the second one, to be on the spot and you just need to be prepared for that and make sure you’ve got the right people, but you don’t want to be on there answering legal questions, have your attorney for that.
You don’t want to be on there answering tax questions. I have your CPA and it may take, the expectation is that with your vendor is listen, this may be a snooze for the first couple of weeks or a couple of months, but if you can commit to it with me, we’ll like, we’ll continue doing this.
And we’ll all benefit from it long term, but some ideas it looks like you’re thinking outside of the box. So maybe that wasn’t helpful to you. Okay. That’s an idea. I’ll look into that. Thank you.

Change Your Cold-Calling Mindset

[00:29:54]I think I got something and I’ve got a three and I’ve got a, I’ve got a three o’clock appointment, so I’ll say I’ll make it pretty quick. Okay. I think that first call out early in the game. It was for me it was, I want to get the information out to you.
I want to tell you about what I can do for you. I want to find out what’s the biggest problem that you have is, and what I’ve learned. Is that I need to slow that down and I need to try to connect before I start trying to add value and what what that does and what that looks like is asking about the family.
And who’s involved in the family where they were, where was the decedent in the family as a structure? What did you remember best about the scenes? Tell me some stories the object there is not to draw out the conversation with the PR, but to try to find a way to connect with with the family and the PR so that they they feel more comfortable on other topics that you talk about if you can’t get through that.
And if you get through the if you can get through the initial stiff arm or the defensive conversation with them it’s it makes a big difference. And even even to some extent, does the humor can play a part in breaking down those kinds of barriers initially, so that you can, so that you show that you can connect with them on a different level and use that as you as a part of part of what it takes.
A bit of a creative imagination to try to find humor in the discussion there, but keep it about about having happened, finding a way to help them relax in the conversation about something that they may still be pretty tender about. And that’s the other issue is it just may be way too early and not trying to push too early in the process.
They’re going to decide when they’re ready to decide. And it might be two months, three months, six months, but finding and making the connection with them about about in, in California about the Step up basis being being done now that’s new information for me that California let go of step, stepped up basis.
Eddie is coming to a market near you saying because they’re it’s in the federal proposal. That’s going to be a hell of a fight, but we’re all likely to experience that. Yep. Yes. And I and that, that’s a fearful conversation. You gotta take care of this really soon because I’ve got other people that I’m talking about, that product, that issue as well, I bring it up and all of a sudden I started seeing eyes shifting and, and just it just, it almost creates fear of loss.
And that now that’s a huge motivator, but somewhere along the line, you’ve got to be a human being. And I have a way of helping you with that. Would you, are you interested in hearing what I can do? And we can try to do that. Yeah. The thing that came up was I’ve had Three in the last four or five years, I’ve had three executors who have asked me how they can take care of this single handedly and put the other family members behind him in doing that.
And at one point during the conversation he sat there and he said, golly, you know, I just wish I could buy him out. You can do that. Yeah, you can do that. But it took a bit of going into and a little bit of humor to get to that point. But then all of a sudden he started thinking, I can just reach an agreement with them and get get their get their signature on.
They’ve been satisfied with the estate and and move on if the executor or the PR has the, has that in. And it’s happened to me on three different occasions and I just kinda went, wow, that’s one way, and we talked a little bit about that. I did some research told him what he needed to ask his attorney about and said, this is the document that needs to be filed with the court.
And and he just sit there and he said, thanks. Then we can get really get started on the whole process because he knew that there were people in the family heirs in the family that wanted to hang on and it was just what’s your number. And at that point, once he got to that point, it was wow.
Okay. Court ordered in Arkansas court ordered distribution, equitable distribution is is the term that I’m bringing forward. Equitable distribution is usually used in divorce cases. And like it’s a court decision on how it’s equitably dissolved divided wills have that in there. It’s just a court supervised distribution of what the will says and as well as in trust, but intestate, it’s in some cases there’s there’s nothing in there.
So I think that that, that whole thing of, what is it going to take to get you to go ahead and say, I’m done. Here you go. And if the executor or the PR has the money, then they will have the complete control over it. Not have to do that, but it is important to use something like RingCentral or a zoom call to get everybody on that initial meeting.
And if there’s somebody in that initial meeting that is not necessarily the PR, but is making a lot of noise it, as long as you introduce yourself and find out and connect with the family during that time frame, then you can use that that conversation with the PR later on to say, that might be, who’s going to be who’s going to be along with you.
Who’s going to be going to want to run this show and how to do that. And I’ve done. I don’t mention it on the to the PR during the conversation with the family. I just wait for the, I just wait for the PR to bring it up. And again, and who are, where do we stand on on this on the agreement side of what we’re going to do.
So thanks for that. Roger guys, for anyone who hasn’t followed Roger’s history. Tell them about our first conversation. I don’t prospect. I don’t make outbound phone calls.
Oh, heck no. Oh, heck no, I don’t make outbound phone calls. That was my first conversation and yeah. And it just it just really is a matter of a matter of getting over the reluctance getting over the the. The inability to have the courage to pick up the phone and face the no and and then finding, and then taking a lot of note, taking a lot in those, but then following up again.
And that’s the other thing that I have to say about a conversation is don’t hesitate to call again, even as they say, don’t call me, call them again. I’ve just had this week, I’ve called three times to somebody over the last three weeks on Monday morning and over the last three weeks. And.
Just yesterday, he called me and he said now what’s this deal that you were talking about? It’s just a matter of their absorption into it. So that’s a lot and it, you have to take the conversations and take them to, what could I have done better listened to a mastermind calls, listen to what Chad has to say, practice with somebody else.
And and have a good coach language coach is paramount to me. And it’s just one of those things that no, initially, no, I don’t make out, but outbound call. I’m just going to put these men letters out there and I’m just going to wait for the phone to ring. And so it was just a matter of picking up the phone and learn to make good friends.
And that’s w that’s the way, that’s the way I try to approach it. Roger, thank you for being here. And I will have said this to you privately, but not for a while. I’m proud to have you as part of this group, because it’s been really interesting to watch you grow from that. I’ve been in real estate for 30 years.
I don’t make outbound phone calls to actually serving at the highest level of. Anyone I’ve ever worked with. And what you guys may or may not know about Roger’s story he’s testified in court. He gets the divorce cases because he’s built a level of trust, not only with the consumers in his community, but also with the professionals and the vendors that he works with.
He’s on a radio show, he’s in a courtroom, he’s dealing with divorce and playing intermediary there. And it was a bit, I at least I think, you really took this to heart and challenge yourself and trusted the process. And it’s been fun without a watch man. So thank you for always staying engaged with us and contributing back to others.
You’re an asset to the group. Roger. Thank you. And the difference between a BPO and a CMA is night and day to the court. Don’t turn in a CMA to the court, do a BPO and all of a sudden the judges start recognizing, Oh, This is Roger’s thing. Okay. Yeah. Nevermind here. We’ll just go with it. And in Arkansas, that’s what you call an appraisement, right?
Yes. That’s what we call them. Yes. It’s an appraisement, it’s a whole lot of different variations, but when they, most of the guys that are, that don’t know what the heck they’re doing there. Price per square foot in a subdivision or trying to find comps and doing something like that. But that’s what I’m doing.
Thanks a lot. I’ve got to run. I’ve got a three o’clock enjoy, always trying to catch up with you. And and Tuesday’s a busy day, got the show in the morning. And I got dropped off a survey at the city of Fayetteville and this morning, which is another probate. We’ll talk about that one. That one turned out to be frigging nightmare, but it’s just all of us save that one for next week.
Let’s do the deal. And now the nightmare deal analysis next week. Okay. We’ll do that. We’ll see you later. God bless you. Thanks, Roger. All right, Rosie or Dwayne? You guys, whoever wants to jump in, I’m telling you the light we just exchanged. Oh, thanks, Rosie. Appreciate it. Oh yeah. Sorry. Anton. Your handlers.

Tax Changes and Motivating Sellers To Act Now 2

[00:39:37]Yeah, I know, right. I will stay like this next time. I have a general question. It’s actually an objection. It wasn’t probate related, but I’m sure it would probably apply to someone in probate. It’s a tax I’m going to get hit with a massive tax objection. Have someone that’s got like a huge apartment complex that he’s considering selling.
And I told him even Hey, listen, I think, you know the best way to do it. You better sell it right now. So urgency in the marketplace because everybody’s scrambling and what the proposal on the table is. Terrible for the real estate industry. It’s terrible for small businesses who own real estate.
It’s terrible for inheritance. It’s really, I, it’s hard for me to stress how, what a negative impact this could have scaled out over a 20 year period. So you’ve got this brief period between now and the time these politicians all go to war with each other and try to sort this out into a final policy right now, as one of the best times in the last century to sell your real estate holdings, because people have FOMO there, the valuations are based on emotion, not value.
And especially in the multi-family space, like if I were him, I would sell that damn thing. And 10 31 and D. Anything that I could, while I have an opportunity and he’s still just deferring the tax. The thing you have to look at, if he’s a high net worth individual, he may, he’s never going to pay lower taxes and he’ll pay right now in this environment.
And you can Mark my words. This is being recorded. If I will donate a hundred thousand dollars to a charity, if there’s ever a time in history where my taxes go down, because I don’t believe it will ever happen. This is it. Like we have printed down there, $10 trillion in money, and JP keeps pulling the lever.
So my advice to him would be if tax avoiding taxation is really your primary motivation, then let’s just sell it, pay the taxes, roll that into a Roth Index universal life or some other tax advantage asset and forget about it. Cause you’re never ever going to have a low, less of attack or less of attacks and you have right now.
And if he says that’s crazy, I’m not going to do that. Then roll into a 10 31 as an alternative. So step one, option a is pay the tax. Now while you can pay the lowest capital gains rate, you’ll probably ever experience in your life. Option two is defer the tax and that lets you, it lets you build your net worth higher, but you’re going to pay more tax in the long run.
And really option three is don’t sell it, sit on it forever. But the step-up basis is, taking the step up basis away from him. He’s going to, they’re going to tax him when he’s dead. So there’s no escaping the tax. So he only, he can make that decision. Dan has advisors, but you know my advice, if saving money on taxes is primary motivation, I think selling now is the best time.
Okay, thank you. And I did talk to them about 10 31. It’s weird. I’ll just give you some background because I think it probably matters. But first of all, the guy’s motivation is he said he made some bad investments in crypto of all things. I was like, are you kidding me? But yeah, he’s, he stands to make a good chunk of money on this thing.
He is wealthy. And, but the thing that was weird about it is the guy for some reason, at the notion that he can avoid taxes altogether. And I try to be nice and I try to tell him like, dude, like you can probably defer or minimize to a large degree, look at a 10 31. But he’s what if I sell to an investor off market for cash?
And I go, it’s going to record the title transfers. You’re still going to get hit with it. So I was thinking, maybe do a an owner finance. I go investors right now are chomping at the bit. If you’re willing to do owner finance on it, that becomes risky in his particular situation.
If he’s a high net worth individual, he’s going to be pushed into the highest and the highest tax bracket. So spreading his gain out over a front, on an installment sale, wouldn’t serve him. He’ll pay more tax. Like you need to close them out. This tax year got otherwise he’s going to be taxed at a higher rate.
Almost guaranteed. Yeah. I offer them, putting it on the MLS and he started giving me this whole objection about, I want to pay no taxes. And I’m like, dude, where are you from? Come on if it, and he has so many investments to the point that she could not even answer simple questions as far as is there a mortgage on the thing.
What is your gross monthly rents? Does he have a living trust? I have not even asked him that. I think both gentlemen needs to sit down with the high net worth estate planning attorney and I’m opening the connections. And I did tell him that I was going to hook him up with an accountant or something probably, but there’s an opportunity there.
I think he needs some serious guidance. I think he’s one of those guys he’s in the Bay area. He’s got more money than he knows what to do with it. Like I said so much to the point that he’s we got multiunit properties all over the place, something else that he didn’t, he might not be considering.
Do you think he’s has a big heart? Do you think he’s a philanthropist. Haven’t felt him out just yet as two guys, one of them, one of the things he can do to really avoid taxation and get a double benefit, if he can actually just deed the property over to a five Oh one C3 and he can take a, the market valuation against his taxes.
And you’ll zero out his income tax liability on all of his other assets, like all that other income. So what might like if he’s really a high net worth individual, like the, what might serve him best if he’s, if he has a will to give, would be just offload the asset and a donation to a, a reputable non-profit, he gets the tax receipt and then uses that to wipe out his taxes.
And this is a conversation that I have all the time with one of my good friends. I was helping him understand how. Listing a property is not always the way to make, to build longterm wealth. Flipping a property is not always the way. Sometimes it makes more sense to use a property, to minimize your own tax liability.
Your ROI is ultimately higher. So yeah, you can make 15, 18% return, flipping a house, but then you pay all the income tax on all that and it gets chewed up. So what if you could just anyway, there’s ways that through charitable giving, you can create a tax situation that favors all, all of your other earned income and capital gains.
So that’s why I say probably needed to sit down with someone who’s used to working with high net worth individuals. Cause he’s probably not thinking about this, but sometimes it could serve you better to give away a $20 million building than it would be to try to sell it. Because you can carry that, like that tax advantage on his other high-performing assets cause it, it could save him a hell of a lot of money just for clarity who determines what amount would be written off is that based on tax assessment and if the tax assessment is outdated based on what the house could sell for today on the market, is that if I were going to do that, I would pay for an appraisal.
Just so I have a clear market basis and you probably, it’s not necessary, like whatever you report, whatever you ask them to put on the receipt is what that will probably put on there. But just if it, just to be sure in case I ever was audited, I would say here’s an independent appraisal.
This establishes a basis value for the asset. And that’s what I would put on the, whatever the highest was like wa with a commercial appraisal, you’re going to have three approaches. And the income approach is probably going to give you the highest valuation. That’s the one I would want on the tax receipt, because that’s what I would sell.
I would use if I were actually selling in the marketplace. So whatever the income approach value would be on an appraisal report is probably what he should put on the tax receipt. And then use that to offset other tax liabilities. Thank you, Chad. I guess the main thing that I’m looking for is information right now.
I want to. Make sure that I give this guy really good, access to information and guidance, and I don’t have access to those kinds of individuals. I was going to make some calls and try to find someone, but if you’re willing to maybe at some point, totally, I was going to offer some folks in my network.
So that there’s a firm out of DC that I’ve worked with that has been working with high net worth individuals for almost 200 years. There’s another out of Phoenix, Arizona, and they’re more creative like on, on different types of asset protection, trust, international trust and bridge trust. So he can I’m hesitant to put him into that conversation because he’s looking for a way just to, skirt.
His responsibilities. And some of those guys, you can start to do stuff with off shore counts. Now it’s also a good way to get your to lose all your assets. But so I can introduce him to some folks that are very ethical and used to working with high net worth individuals. Those are some of the folks that I want to bring into this community, bring into this call. And I just, we haven’t brought them in yet, but those are he has options and I would say, and this is, not hardly worth saying at this point it’s speculative, but I would say that the least likely. Part of this current bill to pass will be the step up basis part.
But 10 31 that’s super contentious. How many politicians do you think don’t use a 10 31 provision? How many politicians want to pay want to give up their step-up basis? So it’s going to be a hell of a fight. So who knows, but I would, the good news for him. Like you need to show him that.
And so they went, why don’t you go pull that bill from, that’s on the table. And I think he’ll feel the urgency to sell. And if not, they’re like why don’t we donate this and, show out well, here’s how that benefits the rest of your state. But yeah. Let me know if you need the name.
I’ll set him up with some people. Yeah. And it’s not that big of a, I’m not in a big market, but he’s making substantial amount of equity. He bought it for 600,000 and. We’re thinking, I’m thinking it’s probably in the mid to high $2 million range. It’s the worth of it now? I think the main thing is just to make this guy realized there’s no avoiding taxes, let’s just start there.
And he probably needs to have a good talk with an accountant to help drive that concept. If he were in front of me, I would pry to see, what what legacy is he envisioning? And what matters to him? Something matters to him. Maybe it’s horse racing, maybe it’s the school he went to, he could start an endowment fund for a high school or community college or an elementary school, a charter school.
There’s so many things he can do that will carve his name and time. And he gets the benefit, behind the scenes. He gets that the public, the social benefit of that, this display of philanthropy, but the financial benefit of, it’s better than the alternative, even though he doesn’t want to pay any taxes.
Who the hell does? But so I would be looking at what is your vision? What kind of man do you want to be remembered as, and then I would base my guidance On kind of the answer to that question, because from what we know so far, I think probably donating the asset might be his best play as far as the percentage return.
But it depends on what his earned income is. How much of a tax liability he currently has. There’s a lot. So anyway, that would, I would look for that. What’s his legacy, what’s his vision for a legacy and then get him over to the right advisor based on that. Okay. Thank you. And I haven’t really researched the step up provision, but it sounds like it only applies once you pass.
So how will it be? How will it be related to him to let some fire under his rear end to so we’ll get rid of it now. He’s in California, so he’s subject to that already because it’s, that’s the clock already stuck. 12 struck 12. I wasn’t, I was overlooking that the assets in California.
So he’s going to get hit with that anyway. So that’s okay. It’s in Washington state. He lives in California. Oh, yeah. Then he’s he wants to get it done before this could become policy.
Thank you, Chad. Appreciate it. And I’ll connect with you. I have your email, him to donate it to Amazon. They need money.
Thanks. I feel so sorry for Jeff Bezos. All right,

Financing, Lines Of Credit, and Business Structuring

[00:51:16]Chad. Okay, so I’m encouraged to ask this question first. I did go to the local bank and open an account with LC to figure out what kind of loans they would be willing to offer me. Remember the presentation you mentioned last week, that mud port by banks and open that. Just to make sure I’m able to make full use of my time with them.
Do you have something on top of your mind that you always found beneficial getting as financial lines of credit or loans that help us investigate or because here’s what I’m thinking, what will work for me in the investment, what will actually work for other people when they are doing their probates and their rentals.
I would love to hear from you on that. So ask me the question again, like what you want to know, what would be beneficial to ha to proactively have it, right? Yeah. It’s like I have rentals, right? So we created LLCs for that. So I’m actually creating the accounts with them. So we are showing them, okay, this is the book of business.
This is the property’s worth. This is the rental agreements. So we can start getting lines of equities against their pre-session to reinvest again. Tell me, are you viewing your rental portfolio as a, we will own this forever or do you have an end date in mind? I would like to switch to electrical socket in, into a multiplex eventually right now they’re a a single family or duplex.
So one of the things you might do, you can consider to proactively access all that equity under one note is actually put a blanket commercial lien across all assets, and then draw a commercial line of credit against that. Now what you want to make sure is that they are okay giving you a partial release, because if you ever change your mind and you want to sell one of five assets, you need a partial release in order for them to release the lien on that one title.
So it like that structure can be extremely beneficial mainly, and it saves you a ton of finance charges. You don’t have to go refinance five things and like it’s so having a blanket commercial lane across a portfolio, conserve you in a lot of ways just make sure that the bank is willing and has a history of allowing partial releases for partial, for select asset sales.
So that’s something you can do to act, to get all your money on one bucket for other investments. The other thing that you should discuss with them is what if you deposit even more cash into a CD and then draw a commercial line of credit using the CD as collateral, and they, some banks will give you as much as five to one leverage John, that vitamin wow.
Okay, sounds good. I’ll look into it. And then the other thing, if you didn’t cover this already, obviously just a general business line of credit, like with, and just a trick that like with first citizens bank, the one that I use for this most often, as long as I keep the request at 49, like below $50,000, it doesn’t even have to go through underwriting.
So every time I start a new business bank account, I asked for a credit card, like on this, on the new company that I formed, literally the EIN number was like two hours old and they gave me a 40, 49 commercial line of credit and a $75,000 credit card with 3% cash back. And they have, God knows. I’ll never use all that.
I haven’t drawn down a single dollar, but when. When it’s hit, when it’s hitting the fan, it’s nice to know you have strike money, right? You’ve got liquidity. So anyways, that’s like the things like ask for the business credit card, ask for the business line of credit, asked for a CD with, with align against it, ask about, the blanket lane across the assets you already control.
Sounds great. Sounds great.

Eviction Moratoriums, Mortgage Payments, and Foreclosure Chaos

[00:54:47]Chad real quick, I would love for your input into this kind of prospecting. So I’m was sitting with lot of investors and of course I’m telling them that I’m doing an appropriate specialist as well. So naturally I’m attracting leads. Chaz that don’t have will, and heirs are not on the board are on the same page to move forward.
I’ve done a couple of transactions already, but I’m receiving a lot of pushback because that’s just naturally our prospect can people who are going through foreclosure. So these people are on the foreclosure list and the owner has been deceased. So the foreclosure date keeps getting pushed back.
Since last may. And just now I’m realizing that moratorium is not going to be lifted until January of next year. And COVID is officially the short sale, a short sale hardship. There are a bunch of hardships for short sales COVID-19 is actually a fishy, a hardship. So then encouraging people for a loan modification.
And I can see people haven’t made mortgage payments since may of last year, in some cases. So I would love to know your perspective, like how can I angle my conversation here, where the urgency is foreclosure, that they’re going to lose everything and they will act where they keep getting time. Like where do you foresee this stopping?
Or how should we handle those weeds? You we’re talking about in general, not if if a death has, or has not occurred just general, like it has already occurred. Here’s I’m not cooperating because the prognosis pushed off another three months now and the divas becoming that much tinner for perspective and buyer, yeah. I would point to the educate yourself on the policy behind this, but basically what they’re doing is they’re just re amortizing the loan and tacking the, the balance on, onto the loan amount. So ultimately they’re going to end up paying a lot more money and I would probably go the financial route.
It’s hard and the stick has been put away for, and it’s going to continue so you can use the carrot of, Hey, wouldn’t it feel good to have more equity and wouldn’t it feel good to have this asset paid off sooner? There’s not much T there’s not much that you can do with a stick right now.
Because we just keep. Kicking that can down the road and deferring that responsibility to pay back debt. So I would point to the positives of actually continue, selling the asset or continuing to pay on the asset. And these are these with equity or without equity, they got solid equity.
Like one of the deals that I did is that none of the ears were on board and the guy was like, had bad luck with his parents and didn’t wanna you don’t even look at anything regarding the property and my investor, like the second investor I bought, he was like, that’s buying whatever it takes, and we find he finally increased the artists money for a normal 1%, almost 20 K and short book commitment with the tile company and they all acted up. So it’s good. But I can see this deal would have closed in last December. Our scalability to our investor is much better than I’m closing now.
There’s five months of late each choice. There’s five months of late payments, more interest, more attorneys, trustees involved, right? Our up is much more different because once it’s in the foreclosure, you have to call the trustee to make sure the foreclosure is pushed off or not. Investors want to have an assurance that the deal’s going to close right before they were willing to put all that money and effort into it.
So I was although it was not exactly probate, but by alerting probate and sitting in investors, I’m attracting these, attracted this business where they’re multiple EHRs. They don’t have a whip so wonder passed away and there’s no way. So in that case, I have to do academic affairs ships. And it’s very encouraging to know a foreclosure date.
You, because you can use that as an urgency to get everybody to get now that they know it’s pushed off, they have more things that they wanna, Yeah, I think the urgency, you can create some urgency by helping them focus on the financial side of the decisions they’ve made, the choices they’ve made and they’re not, I think a lot of people perceive this as a free ride.
That’s ultimately going to cost them a lot more money. Now the thing is like the it’s such a rush, the kicking the can comes with a lot of restrictions too. So they’re not going to be able to charge a higher interest rate. It’s just going to draw it out over more time. And the inflation because of money printing is going to help pay off that debt.
So the banks are really losing this time. But it’s pointing them to the, the accrual of, the interest and the time value of money. It was about the only mode, the only, motivating factor that you have for the, I want to ask you this as a savvy young woman, if you were in their position, what would it take to motivate you?
What would you do? Assuming, and we need to make the assumption that you take your own values and put those aside, like you’re missing the payments. I don’t think you’re the person that would ever miss the first payment, but let’s assume you did what would motivate you to get out of that situation when you control the asset you control, you can get the income off of it.
And you know that you got another 18 months or 24 months or 36 months, who knows, like what motivates you? Very good question. Chad, matter of fact, I ended up asking myself that question. Do we engage this lead? And I still have these two questions on front of my new book that I really ask every prospect.
I would ask my uncooperative heirs. How would you feel giving away what’s rightfully yours in this property? If you don’t act no, and we don’t take advantage of the market. Now, the debt continues to go up. So ask my heirs. We’re not cooperating if I have an onboard and they’re not in there.
The reason the thing is the whole deal is held up. I’ll ask this question to them and simply ask, what will it take for us to move forward? And I see your point that if the act now they still have more equity, but later on either you foreclose and you’re at the, of the investor wants to just cash out at what the payoff is, or you just let it all go.
So occupied this property, no weekend, it was very tough. I didn’t want to take too much time today. Just to like bullet point, the whole conversation wife died. Husband died, had three kids, really bad blood with almost all three kids. I don’t know how that happens. The older son Lesker has sister.
We lived in mom and dad’s house and she passed away too. Had a brother, Jerry who passed away as well. So the sibling brother has two sons, sibling, sister has a daughter and he’s still alive. So it was a big mess. And I was only talking to the big brother. I was only talking to the big brother who was the main decision maker.
And he was just adamant that I want $8,000. Otherwise I wouldn’t even look at it. And the deal fell apart the very first time in January and December timeframe, because 8,000 number didn’t happen. Because at that time I was having to eat as a listing agent on brand product and buyer got him to do everything.
What type of notes on it? Rosie? What type of note it is on it? Yeah. What kind of mortgage is it? Just the convention. I’d have to check. I think it was fat originally because they were the original owners and they never reafied. They were really old school people. And just, and I think then they let their daughter move in.
She stopped making payments for two years. So the property had the seized owners for over almost a year and a half year and a half at this time. What kind of condition is it in bad? Yeah. That’s if it were in fairly decent condition, I would say, take it sub two and ride it out. I’m actually buying new cheese.
So we actually turned it around because I couldn’t send it as a listing agent four months later, or three months later, I would say, I literally told that the deal didn’t work out because the person was bringing me in the end buyer. I can see there was more cushion in the deal. He was not bringing his price up to make it work.
But the market also shifted since January to Austin and is like really crazy right now. So I told my investors, I said, what have you approached this dude as a buyer? So I approached it this time as a buyer and rather than eat cake, he’s getting 20 K. And that’s what city of earnest money from our minister.
And we’re going to flip it and it’s he didn’t want to do deal with anything. And I think his main hangup was that within eight K it was not enough for him to get all the airs on board to sign off on AOL. Then Senator information form sheet is needed to order the loan payoffs. That’s it advocates like he didn’t even know any debt certificates, any social security numbers, nothing I have, by the way, a little tip for everyone.
If y’all don’t know the marriage date, there’s something called family Bible. I just learned this in distress section. So you asked one of the heirs, if they have family Bible and some of the times on the back of family, Bible, there’s everybody’s birthdays and everything. I don’t know if you’re going to need it, but if anybody’s doing affidavit, drop your ships, I have done one.
And I think I’m an expert at it now you’re going to meet it. So family Bible is something you can ask for. But he looked through it to find more details. Yeah. And you’re in Texas. There is one, right? Yeah. Thank you. Good. That’s right. Thank you. All right. You’re up next? How can we help you?

TCPA, DNC, and Cold-Calling Probate Real Estate Leads

[01:03:37]My question isn’t as in depth, as the others, because I’m new to real estate and I’m new to probate. My biggest, one of my biggest concerns is all the leads that I’m getting is not all, but I’d say 75% of them have. Almost all the phone numbers are on the do not call list and the ones that aren’t on the do not call list aren’t active anymore.
So how do I approach that? Because I can’t afford the the fine if I get deemed for it. So how do I approach that? So I, I was one of the founders of all the leads and we started that in 2013 and I kept track of, I dunno, probably over 7 million phone calls. And in all of that, what I saw one time that one subscriber was somewhat reprimanded and that was a phone call from an attorney out of the Southern district of New York.
They called and said, listen, I’m calling on behalf of the FCC. You were reported for calling a DNC number. Please don’t do that. That’s as stern of punishment as I’ve ever seen. And I know there’s probably other stories, but as a solo practitioner, most people. Just decide to weigh the risk reward.
And most folks will look at that and say I’m going to make the calls because if you are a professional and you’re cordial, it’s unlikely, you’re going to piss them off enough that they will actually take, take it to the full extent. But your penalty is $250. That’s what you get now, as long as you’re not like constantly, if if someone ever says, don’t call me again, then you can take, honor that, and it’s unlikely they’ll ever be disturbed enough that they would pursue you, for some other penalty.
But it’s, there is risk. The governing body is overwhelmed and under you’re staffed and it’s difficult to track down. So they’re mainly aiming at call centers and people with big targets on their back, where they can get big, subtle months and resources in the department. So I’m not going to tell you, you don’t have any risk but you’ve got to cover your own assets, but most folks don’t think a whole lot of it because they’re calling with an offer and, some people will argue that I’m not soliciting anything I’m calling to offer help, looks like a duck quacks like a duck.
It’s probably a damn duck. So it’s, I don’t, I’ve heard attorneys tear that apart. And but the thing is it’s a debate that we don’t often, it often doesn’t have that much meaning because it hasn’t ever really proven to be a problem. Now, TCPA is a much different thing. If you’re using SMS marketing, I have very different advice.
Because there are they a hell of a lot of liability in that and a lot more coming. But they’re passing it to the providers. Like they’re going to go after the phone companies for TCPA violations. So robo dials an uninterrupted in SMS, text marketing. There’s a narrow window of opportunity there before it’s there, they’re gonna basically shut it down through the big phone providers.
So I’m not too concerned. I know that like it’s, like I said it’s your liability, not mine. So it’s easy for me to say that, but based on what I’ve seen in the thousands and thousands of people I’ve coached, I don’t really think you have a lot of personal liable. I’ve signed up for and became part of the do not call list and got all that information.
So my phone number, I’m not even sure how my phone number comes across to people. When I call, make phone calls, if it comes up as my number or telemarketer or spam risk, I’m sure we all got those phone numbers, those phone calls, but yeah. If I’m making that call, am I, because I have that, my number registered as the hand dialing, it should still show up as your caller ID.
So it should show up whatever you have. I don’t have an auto dialer yeah, so you can actually, and you can go into your are you calling from your cell phone? Or desk phone. So you can go into yourself. I’m sorry. I’m remembering a story. I played a prank on my dad and I went in and changed and cause I’m on I have all my whole family on my cell phone plan.
So I went in and changed his caller ID to first name Ima last name shithead. So every time he called somebody, it would show up I’m a shit head on the caller ID. And this went on for six months before he finally figured out it was me. Cause he couldn’t figure out why like Tom, like people would be like, Tom, would you say you’re a shithead?
Why would you say that? But you can actually go in your you can log into the backend and change. What, what shows up like you can change it to like I’m a realtor might be a better one. I’m not a realtor. But anyway, so there’s really no connection between the DNC database and what shows up on caller ID, what you’re seeing with the spam risk or, whatever other ones pop up.
That’s where they’ve built technology that actually recognizes those dialer systems. So when it’s a mass delivery, they’ve put, they’re putting filters in place that will help them. And that’s why I say like the FCC is making this, the burden of the carriers because they don’t have the resources to police it.
So in order to make any impact, they’re going to have to threaten the carriers and make that their responsibility to get it under control. Okay. So I should probably clear that with my My principal broker though first. You know what his answer is? Yeah. Yeah. She’s a good friend of mine.
We’ve been friends for over 20 years, but yeah. If she’s been in the business for awhile, she has her answer to this too. And I would bet that it’s probably similar mom. Like you’ve got to look at that. How much harm am I doing and how much risk am I taking versus what reward can I get?
And what value could I provide if they do pick up my phone call? All right. So that charge is only 250. Cause I heard it was like 13,000. I think it’s two 50 per occurrence on your first occurrence. It’s been a while since I read the actual law, but if you Google FCC DNC law, you can find briefs of it.
Okay. Luckily I don’t know. I do know TCPA because I got pinched.
Sorry about that. All right. Thank you. All right. Third year up last today, brother with DNC also is that a lot of the attorneys have DNC on their number, which is kinda like, all right. That makes sense. You’re the attorney. It’s a B2B call. All right, cool. Question regarding a COVID situation, I actually just saw it.
I have a client who owns a condo. I have a we actually know that the tenant is faking, but two. So client owns a condo here in LA. She lives in Atlanta. So I lease out the condo for her and the tenants stopped paying about three months ago and called me saying that because her mother passed away from COVID.
So obviously I wouldn’t question that Challenges client completely stopped answering. And now my client is struggling to the point where she may have to sell the condo. If this lady doesn’t leave now, fortunately her lease ends June 16th, but at the same time you can’t evict anyone. So is there there’s something that may, are there maybe programs for.
You know how, like for people there’s PVP IDL, all that stuff. Is there something there’s more help coming? So a lot of a lot of the initial money, like the initial round of printing actually included money that treasury sent down through state housing authorities and a friend of mine who had a Laura sizable multi-family portfolio, he actually took $743,000 that they put back into their accounts.
Now they had to do, it was a whole, it was an administrative nightmare because they actually had to coach the tenants through, filling out the paperwork, submitting it to the right office, waiting for that getting approval. But it was a considerable amount of money, so it was worth it. So he ended up hiring two full-time employees just to oversee that process.
Very few people have talked about these programs, but I know like they. The word has, I think a lot of multifamily guys, very discreetly said, Hey, don’t tell too many people, but here’s how to take care of yourself. But in this new bill there’s more relief actually written into that. So where you can, you know that the tenant, or I think the new process will be like where the landlord can actually apply this.
The first round of money the tenant had to apply. So if they’ve shut down and stopped communicating, it doesn’t serve it doesn’t do you any good? Like they are not willing to help themselves. And it doesn’t come with any penalties like it, it basically, it didn’t come with further restrictions.
It wasn’t bait to get the landlord roped in the never being able to evict. And it didn’t come with any penalties for the tenant. It was just pure, here, it’s Liability or the erasing of liability. So there’s more of that money coming. However, I don’t think it’s available right now and it sounds like she has some equity, but she won’t for long, if she keeps making those debt payments and has no income.
Yeah. I’m almost thinking what are your thoughts on her maybe while she waits for that, maybe obtaining a hilar on that and just a, he lock on that specific condo in order to continue. Cause essentially she said, look, I, she just bought another place seven months ago and then the tenant stopped paying about three months ago.
So the savings that she did have, she used a lot of it for the down payment for the other property. And now she’s just running out of savings. So just talking to you right now is just thinking maybe she could get a hilar on the current condo that she has a tenant in. On just hope while these other programs hopefully come into play.
And then maybe we see if the tenant can go through those programs too. It’s possible. It depends on her larger financial picture and how much other income she has coming in. This is a non-performing asset and the underwriter is going to have a pretty hard time refinancing or like finance, like putting a line against it, taking a second position.
The more likely thing that you could accomplish would be a refi on the first. Because that second position lender knows if it’s a non-performing asset, only a damn fool will take a second position right there. They have no leg to stand on. So the more likely scenario and in this interest rate environment, like it’s, when did she buy it?
When did she originate? The number one, the one that has the tenant 2014. Yeah. So Holy hell she should have refinanced. Yeah. I don’t know if she has, or hasn’t them just thinking out loud with you while we talk. Any owner refi any lender that sees like us back when this asset was performing, when rent payments were coming in, as long as the debt coverage ratio was above 1.2, five, anyone would have taken that.
Now it’s iffy. Because if they, they’re, the underwriter is gonna want to see at least 12 months worth of rent rolls, and she’s going to come up short and they’re probably not going to make that loan. So this is where you might have to get a private lender involved or sell the asset.
Okay. All right. Let’s see on a private lender is not going to take a second. So you probably will have to sell the asset and establish, like she may be able to remain a partner in the asset by selling it to an investor. Then she’s on the operating agreement as a partner in the deal. So I would say, find a guy you trust.
He’s essentially loaning her money. He’s paying off the debt then getting equity for that. So you could partner her up with the acquiring investor as long as they would want that. And if not, she probably should just sell it now while she has equity. Yeah. Let’s see. I good. I’ll keep you posted.
I wouldn’t count on, I don’t know, man. It’s hard to tell how far are they going to kick the can down the road? If it, if I were in her position, I would be like, you know what? It’s better to sell this. Take the equity I have now and put it in a performing asset with more certainty and not in the fricking state of California.
Thank you tell her to go to Iowa or somewhere, right? Yeah. Sorry. That’s Joyce. Hi. I was just wondering what you think about LLCs as a protection on our properties. So like the, for a a rental property, that was the structure I like the best is a series, LLC. They’re very useful.
So if you have your like we’ll just call your master LLC. So let’s say that’s Joyce, LLC. And then below that you have for, let’s say every three properties. You have Joyce LL Joyce one, LLC, Joyce two, LLC, Joyce three. So you’re not causing such a maintenance nightmare of having an LLC for every single property, but you compartmentalize, you put them into pods, so to speak.
And then at the property level, you put those properties into land trusts. So you have the anonymity and the the. Fee advantage of using a land trust and you have the legal protection of an LLC. And if it’s a single member everything’s passing through anyways, but you get really good liability protection.
So you can use series LLCs and you can choose to do the land trust or not. It just gives you a lot of anonymity. If someone ever were to come after you and say, what all does she own? What’s what was she, is she worth suing? The land trust will make it incredibly hard for them to actually see what assets you own.
And I titled the land trust is like one, two, three Walnut street, LLC. I used the property address. So it has nothing to do with any of my companies or my name or anything else. The trustee is sworn, he’s subject to attorney client privilege. So if anyone ever does throw themselves down a flight of stairs to try to Sue you if it’s a frivolous suit, they’re not going to get very far.
Are you selling everything that you have, all your properties? I sold everything in 2016, but one house. I went in I write mortgages now and I buy syndications, but I sold all of my individual assets. I got nervous. I really, I don’t know why this camera keeps unfocusing. Macro economics made me nervous and third quarter 2016.
I thought we were at the top. And when, like when I looked at the debt levels and when I looked at the moves, the federal reserve was making behind the curtain. I said, this is it, man. This is, it looked like 2006 to me. So I decided to take. My portfolio and reallocated in the shorter term plays.
So I did notes and I didn’t send the cations and it turns out to be, it was a good decision. Like a lot of people were like, Oh, you’re missing out. And I’m like making a fricking 19% return on my worst one, leave me alone. But I don’t have the real estate portfolio now, but I’m way more nimble.
And this doesn’t scare me that much because I did that. It was interesting. I listened to Ken McElroy and he did the same thing, but in the end of 2019, they had about, I think, 20,000 units under their control. And he started to sell off assets, especially the losers. He started to sell off in late 20, 19 and little.
Did he know just a quarter away from where he had, I think they rolled off like $150 million of their holdings. And he saw the same thing I did. So I was concerned with. The amount of very discreet intervention, the fed was still making behind the scenes that since 2008, and I just didn’t feel comfortable in the market.
I thought we were at the top now I’ll have to eat my hat because it’s easy to say I was wrong, but I still have all my money in, I don’t have all the headaches of a portfolio. But I’m going to go back in hard at some point, but it’s probably on syndications. Like I really like making 25 to 200% while someone else does all the work while I hang out by the pool.
That’s good.
And Joyce, if you ever want to look at some of those, like I’m considering, like I said, I’m trying to figure out exactly what this conversation is. If I need to contain it, or if I can just bring all my crazy ideas to it. But I have a lot of friends who sponsor who have, can give you access to accredited investor opportunities.
And I’ve met people first deal second, and I spend a considerable amount of time betting people and really making sure that, it’s something that I put my money in before I ever suggest anyone else. And so I’ve, I really. Changed up my whole investment thesis since 2016, but it served me really well.
And I’ve never talked a whole lot about that publicly, but I’m willing to, and I’m willing to introduce you to some of the people that you know, that I’ve invested with. I really like mobile home parks self storage because of the caution that, that made me sell those single families. I thought I want to be in an asset class that I can back test through the last recession and see performance.
So in a recession, typically self storage their income goes up because more people are downsizing and tightening their belts. Same way with mobile home parks, nobody wants to be homeless. So if you can’t live in the house, there’s a point where you’ll move into a trailer and be happy about it.
Me. I just, I it’s self-imposed for me. I’m a trailer boy now, but anyway, that maybe that’s some of the conversation we can bring to the table, as I bring some of those opportunity then. So you can look at those asset classes that have served me. The assets we’re selling out of those funds are selling at three to four caps, which I think is totally asinine.
That’s why I wanted out of that, the actual, like I wanted out of the market. And I, there’s been some really nice gains over the last couple of years since I sat out, but I’ve made some pretty nice gains in those asset classes, too. Please bring all that into the conversation. Okay. I got your boat.
You always cast with her. Thank you. I’m going to, I’m going to go to the pool I’m not going to lie, thank you guys for being here as always. And we’ll see you next week. Thank you. Bye.

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One Comment on “Tax Changes and the Step Up In Basis: Motivating Sellers to Act Now | Changing Your Cold-Calling Mindset | Group Coaching #5”

  1. In many S-Corporation asset sales, the physical transfer of the assets and contracts can be so time-consuming and problematic that the buyer is put in a position of acquiring the stock instead, thus potentially losing the tax step-up afforded. In the case of an S-Corporation, relief has been available from this problem in the form of a Section 338(h)(10) election. This election allows the buyers and sellers to treat the transaction as a sale of assets for tax purposes with the aforementioned favorable tax consequences while legally transferring the stock of the corporation.

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