Recession-Proof Real Estate Investing: Getting Creative With Probate Properties With Al Nicoletti

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Things aren’t exactly breezy in the real estate market right now, so you have to get creative when it comes to investing. There are niches out there that are relatively untapped and yet are virtually immune to recession. Probate properties is one of these niches, and this is what Al Nicoletti specializes in. In this conversation with Tim Herriage, Al talks in detail about the journey he took in real estate and how he eventually found his niche in probate properties. He also tells us crucial things any investor who’s thinking of giving probate a try should watch out for. Tune in and learn how creative thinking can get you success in real estate even when inventory is at an all-time low!

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Recession-Proof Real Estate Investing: Getting Creative With Probate Properties With Al Nicoletti

I’ve got my good friend Al with me. Thank you for coming in.

I love It.

I’d love to let you start off. Tell the audience a little bit about yourself.

I could go through a whole thing, but I’ll keep it concise a little bit for you. From Miami, I played violin for fifteen years. I’m a natural musician. When I was in music for that long, I wanted to know what I was going to do with my life, like make money. I knew music wasn’t going to get me to that next level. I had to make a lot of decisions. I picked law school, of all things, not medicine or anything like that. I was going to take that and I was going to do some entertainment law thing. I had no idea where it was going to go.

Law led me down a path to real estate because when I got out of law school, passed the bar, took my first job, and it was with a real estate attorney, my first mentor. At the time, we were doing foreclosure defense and dabbling in a little probate. We weren’t as heavy as I am now, but we were getting into a lot of that stuff. I saw for the first-time closings, titles, and foreclosures. A few years after that, I moved to Jacksonville and I had a job up there. That’s when I started my role in the whole probate real estate world. I went from musician to lawyer, marketer, speaker, podcast host, and all the above. It’s been a wild adventure ever since.

I’ve been so impressed by your energy level. I’ve never seen anyone bring it and then you bring it more, and then you never stop bringing it. Do you sleep?

That’s what a lot of people ask. They’re like, “When do you sleep? You’re constantly working. We see you on Facebook and Instagram. We can’t get you off our feeds.” Yes, I sleep. I make sure that’s something that’s important that you get that rest because you got to keep up that energy level.

You are one of the guests that whenever I saw your name come across as a booking, I thought, “I can’t wait to hear this guy’s bottom line up front.” Every week, I asked the guest to help me deliver what I call the bottom-line upfront. When I used to brief generals in the Marine Corps, we were taught to never bury the lead. You got to get the most important thing conveyed in case the general has to get up or you get mortars coming in, or whatever. Take whatever it is you’re thinking about and pour it into the audience. Things that you’re seeing or observing in the market nowadays. Things they should be thinking about, should and shouldn’t be doing. Are you with me?

I’m ready.

Bottom-line upfront, go.

In a market that’s tough right now where inventory is at an all-time low, it’s so important to reevaluate strategies in real estate that you weren’t thinking about before. Whether you were doing wholesaling before and now you get into land or short-term like Airbnb, it’s important to evaluate the market you’re in right now. What’s really important is realizing the niches out there like probate that can provide an opportunity for you in the market because probate’s one of those niches that are recession-proof and pandemic-proof.

It is a constant niche. When all-time low inventory is happening right now, you have to be able to look at other things and creative opportunities that exist out there. Maybe it’s not buying the whole house. Maybe it’s buying the partial interest and maybe you are able to find a way to creatively get around that because there’s so much opportunity out there that there are deals everywhere, but it’s a matter of how you make it and get creative that makes the difference in your game.

You said foreclosure defense. When was that?

That was in 2016.

You did a little probate. You went from music to law school to entertainment law to foreclosure defense, and then you found probate and it’s stuck. What was it about probate that attracted you to it?

There was an opportunity in the market with real estate. There are so many properties that are out there that are under people’s names. What I discovered was there were probate opportunities where somebody owned the property, but the heirs can’t sell that property without probate being done. What I recognize is there was some issue where you can’t sell it. We had to find a solution to that situation. That’s where I found that opportunity. Thousands of properties out there were able to come in and find a way to solve it. That solution and that overcoming issue to help heirs to help the situation and to offload the real estate, something about that made me tick. It exploded from there.

I had Kurt Carlton on, the Founder of New Western Acquisitions. One of the interesting things that he said is we’ve got to find ways to get existing vacant inventory back into productive living. When you have one of these disputed properties or one of these, “They don’t know what to do with it,” it only contributes to unaffordable housing.

I’ll give you a great example. My investment company, we have this house in Garland, Texas, we were trying to buy. We’ve already got a contract, but one heir owns half the house, the other heirs, no one knows where they are and this house had a fire. Now, it’s sitting in a neighborhood. It’s junky and unsafe. It’s one less housing unit for a family.

Someone like us, we’re coming in and able to put the house under contract. We know how to work with the city to calm them down. It needs to be mowed and secured. We’ll go in and do that before we even own it because we do take neighborhoods seriously. We know how to work with our probate attorneys. The title company I use here in Garland, the owner is a probate attorney like you. I’d say half the houses we buy are for people that need help and guidance.

The reason I’m saying all this is kudos to you for finding something that you enjoyed, but what people have to understand is you’re not taking advantage of people. You’re not ambulance-chasing. You’re solving problems for normal people, but you’re also solving problems with the housing market. The more of these houses in America that are vacant, the more that small to medium-size investors can work hard to get those things back into productive living. That’s one of the ways we address the inventory issues we face. That’s one of the ways we address affordable housing.

What’s one of the most important things in any community? Every city wants to build up its community and make it look like a beautiful neighborhood. How can you do that when you have these homes that are sitting dilapidated, the roofs caving in, code violations, nuisance liens, and there are eye sores in that community?

What I think of us is as community revitalizers. We’re revitalizing the community and sprucing it up. We’re making it look good. We’re making communities out on the West side of Jacksonville that had a probate situation and the heirs are able to sell the property. The investor comes in and doing their rehab. Now, it looks like a beautiful house. Instead of beautiful, beautiful, ugly, you have beautiful, beautiful, beautiful. It’s an amazing neighborhood.

The City of Jacksonville and the other cities, which I’m sure you’ve seen all around Texas and Florida, it helps. We are problem solvers. We’re trying to find that creative solution. It’s very interesting. You’re helping heirs that would not have been able to sell that property and would never have been able to get paid anything. You’re coming in to say, “Let me help you. Let me take over this. We’ll let you go on your way and we’ll help you.”

What are some creative solutions to work with a piece of property that’s in probate?

I can go on so many stories. The best way to do it is through stories. I’ve had so many investors come to me and find creative crazy deals that come up that nobody’s going to be able to solve. One of those deals that came up that had multiple themes in it was driving for dollar scenario. The investor came across it. They go from house to work and they see that property and they find out what happened, somebody died.

The first thing the investor were doing after they knew who I was said, “Al, what do we do next?” I said, “You’ve got to try to find the death certificate,” because death certificates are a great source of information. They may lead you to the next person because somebody filled it out that’s alive. They got the death certificate. They looked at it. They couldn’t find anybody there that they were able to get in contact with.

The next thing they did was investigate. They did skip tracing. A lot of the things investors do when they can’t find people, they skip trace it. They did this, that, and couldn’t find anybody. “Al, where do we go next?” I said, “The next thing you want to do is go get a genealogist.” They were like, “A genie what?” I was like, “A genealogist.” They’re like, “What is that?” It’s somebody that does a whole skip trace of the whole family tree and they’re going to find somebody. If there’s nobody, that’s pretty crazy, but usually, there’s somebody. They did a whole skip trace and they found nobody for this person.

The next thing is that the genealogist then goes back and says, “Wait a second. You have to now go down the predeceased spouse’s line.” They went down that line and they found five nieces and nephews alive and they had contact info for each of them. Here’s the thing, you have a house that’s never been sought-after. Now, an investor has the contact info for all the heirs and he starts reaching out to them and he says, “Did you know you’re a potential heir to this property? I’d love to help you solve this.”

It’s crazy because, in the beginning, they had no idea they were inheriting. We all know where this story goes. It then became, “How high can your price go?” The situation was it was 2 against 3. After he heard the whole story and it had nothing to do with the house but had everything to do with the furniture and things that were done several years ago, it became 2 against 3.

You need everybody on board for your deals because that makes it an uncontested smooth transaction, but in this case, you had 3 against 2. We then had to go to plan B, the next level. That’s where the creative side to all this comes. It became, “Can you buy out the three interests so you as the investor are holding the 3 interests and the other 2 heirs are holding the other 2 interests and you can do some partition for sale and find a way to help move that property along.” It then became the price was too low. They all didn’t want to sell.

You get these scenarios where you have to creatively and critically think through these because there could be an opportunity, even if a roadblock starts coming up. Also, you have other situations where there may be a missing heir. We had this one case where everybody was on board, except there was one missing heir in another foreign country. They were facing a tax deed situation in one week. The investor wanted to know and said, “Can we buy this property?” I said, “You may be able to buy a portion of the property and maybe force a sale,” and they’re like, “I don’t know if we want to do that. We want 100%.”

When I heard that, I thought, “There’s got to be a way for 100%.” When I reevaluated it, I found out there was a way to go around this one heir to get the property sold, even when it was a week away, they were still going to get their money on time. We found a way where we were able to get all these heirs under a contract, got the property sold, that one heir, wherever they are, they got their money in the court registry, and that property was 100% owned to the investor.

I love that because, as an investor, oftentimes, the good deals where you make a lot of money are the hairy ones that no one else can figure out. Were you able to do that because you had a super majority or did you have to get a judge to sign off on that? Is that too long of a conversation?

It’s funny you say that because when somebody comes to me with that, I’m like, “We got to sit down and talk for 30 minutes,” but in short, there was a legal way because it was what we called a non-homestead. It was a rental property and because of that, when we have that in Florida, it changes the dynamic of what would be needed and who needs to sign at the closing.

What I tell people is when you get into deals, you need to think about the end in mind. What’s the end? The end is the close. It’s not about, “I got them under contract. Let’s walk away and celebrate.” Close the deal. It’s not about getting deals. It’s called closing deals. What I wanted to see is can we close the deal. It took a team effort, not creativity on my end, to solve it but work with the title company. “Title company, if we do this, can we close? Will your title insurance underwriter approve what we’re about to do?” The answer was yes.

Work through the puzzle and the equity matter too. Something like that, it’s not everyday probate. That’s expensive. There’s got to be equity or spread in that deal, and there was. What we loved about that the most was that we could take a scenario or an experience like that and some of these probate scenarios come up again, and we’re able to say, “Remember this case, we’re able to do it here. We couldn’t do that. Maybe we can do it now,” and I love hypotheticals.

I love when you come to me and say, “Al, I think I got this deal,” and I’m like, “The margins are too tight,” and you’re like, “They’re too tight. We’ll find another one,” but I take that scenario and I plug and play into other scenarios. That’s a lesson to everybody out there to learn from past experiences that didn’t work out because you can use those same hypotheticals for things that come up later.

I love the team approach. I’ve always said, “You have to have a team. This entire business, you can’t do it alone.” If you ever listen to me talk, I always talk about your network. Talk about how important it is for an investor to have someone like you on their team.

It’s critically important, especially when it comes to the legal side and the closing side, even the investor side and JV-ing with investors, because you want to work with professionals and investors that see this niche day in and day out. I do a lot of presentations. I have a saying, “When it comes to lawyers, they’re dabblers or they’re doers.”

If you dabble in it, it’s like all these other lawyers that do divorce, bankruptcy, all these other things that are crazy out there. They say, “We do that. We’ll give it to somebody in the back.” The doers are the ones that run the gamut. They do it every day. They do hundreds of these either a year or every couple of years. I’ve done 300 in the last few years, so I’m not just dabbling. I’m doing.

When investors and professionals work with that, you get into the niche, even if it’s somebody in land trust. If they do land trust all the time, every day, those professionals see so many scenarios, so it helps. Take it with investors. Investors that do an Airbnb, a land deal, or multifamily, they’re well-versed in seeing these things that can help them.

Let’s say you’re interested in land, only land. All of a sudden, you caught a crazy deal. You want to go to that investor that’s doing land all the time to find out, “Are there environmental issues or zoning issues? Am I going to run into anything later with bills?” Working with professionals who narrow their niche, helps blow up your business exponentially because it makes you better too.

In your story earlier, you said once you thought you had found a way, you called title for them to check with their legal team and make sure that they’re going to sign off on it too as an underwriter, which it’s important that everybody accept that they’re never going to truly be the master of the universe. You’re going to have to be willing to ask and talk to people and trust but verify.

That happens with the quiet titles too. How many times you’ve seen a deal where legal descriptions are wrong or a deed totally randomly floating out there? You want to know, “We want to buy this property, but if we do all this with the lawyer, are we going to close the deal?” You’re not worried about, “This is the coolest quiet title we’ve ever seen.” You want to be, “Let’s close with confetti and everything.” That’s called being in it. That’s called seeing it day in and day out.

One thing a lot of investors could do more, especially in the deals, is asking more questions when it comes to title. You’re probably thinking, “What questions do we ask?” It’s the act of critically thinking through a puzzle. That’s what probate is and a lot of these creative title things, it’s a puzzle. Even if you don’t know the right questions, ask something, and it’s going to lead you down the next path.

Are there any red flags or common mistakes that you see when dealing with probate customers?

What happens and something I’ve seen lately and wanted to talk about when it comes to getting all the information is you want to know if this can be done. You want to see what’s happening, talk to people, and communicate more. The communication side of our business is a lot more people-oriented than we think. All these courses and things that we talk about with contracts and deals and lease to own all these are great, but the one course that we don’t talk about is the talking.

You don’t know what’s going on, how long they’ve been holding onto this property, and if they have a family member that’s been around and crazy. It’s finding out the pain points or what they want or looking for. It takes a level of, “You got to get through that to get to the next level. “The communication is key.

You also don’t know if they’ve already had a bad experience with a probate attorney that said he was a probate attorney, but he was a dabbler, not a doer. I’ve got to tell you this story because I’m living it right now. He has this attorney to review his contract. He changes happy to glad, small dog to puppies, special warranty deed to a general warranty deed to a special warranty deed, and then does this entire special provision addendum disclaiming that he only owns 50%. It’s our job to find the heirs, etc. I remember chuckling when I read it all because I’m thinking, “This guy probably spent more time on this addendum than he ever did trying to find the people.”

My favorite part of this show is the Money Minute. Imagine there’s an investor out there that will only get 60 seconds’ worth of advice this month. It could be the young you, a new entrepreneur, or an investor that’s struggling, however, or whatever you want to pour into. You’ve got to impact their business in their life.

Your time is valuable, whether it’s in your business, real estate, or doing your deals. The one thing that you should be taking advantage of is building yourself checklists with sellers. Why is that important? Let’s say you’re getting heavily into a niche. Whether it’s land, multifamily, probate, or whatever it is, you want to be the expert and the master of the craft when it comes to dealing with sellers.

You will know when a seller is serious when they get you the documents you need for title, attorney, and whoever it is you’re working with. When they don’t get you the documents you need, you need to think, “Is this a time-waster or is this worth my time?” Other parties are working together with you on this and you want to be able to scale your business. How can you scale your business when there are people that are not getting you what you need. You have to use your time, make it valuable, and get these checklists together, so you know exactly what you need in your business.

I love the checklist mainly because the part about being an investor I don’t like the most is so much of my word depends on other people’s performance. I don’t like that. I’m not saying I’m going to pick up the bucket and bring you the bucket. I’m saying as long as someone fills the bucket and finds the bucket and brings the bucket halfway, then I’ll go pick it up. It’s important not to waste time because attorneys aren’t free. At what stage should people get involved with a probate attorney? When do people call you?

You’re looking for the red flags or the issue spotting. That’s what I tell a lot of people in presentations, “You don’t have to know all about this. You don’t have to read the books or look things up online. You have to be able to issue spot with this stuff.” When we talk about probate, you’re looking for things like heirs, who owns the property, understanding how deeds work, and what title is.

A lot of people still don’t understand the concept of polling title before you dive into your deal. Probate comes up a couple of times, whether it’s coming up through the title work or what the sellers are telling you. When you hear key language like, “Mom owned it. Dad owned it.” Do they own it now or are they deceased? That’s what happens with issue spotting and being able to work with that attorney like we were talking about with the checklist. It is so important. Our time’s valuable and other people we work with like the title company.

The thing that I’m seeing so much of sellers want to have a meeting. They want to talk to you for 30 minutes to 1 hour, but then when it comes down to it, the investors are like, “Can we get moving with the probate?” My answer is, “We can’t until we have everything.” We know now when they’re serious. Developing a system where you get everything upfront so you know the seriousness level of the sellers is so important.

Communication is the number one tip for people when dealing with home sellers or potential heirs.

Talking to them, listening to them, and actively listening. A lot of times, they want to be the ones that tell you what’s going on. It’s hard. You and I are busy professionals. We got the next thing to work on.

I love listening. Is this ambulance-chasing?

No, it’s not because what you’re doing is you’re helping these people get something that they would not have been able to get but for the help.

Do dead people need houses?

They owned the houses at one point.

In New Orleans, they put bodies in houses. For the rest of the country, once someone passes away, they don’t live there. I have no problem marketing a probate list or working on a probate deal because I’m solving an issue. I’m helping them out because oftentimes they say, “Dad-owned,” but then they also say, “Need to, have to, must,” and some of these things, these people are dealing with a problem.

One time, the CEO of a company that I know through the industry called me. His father passed away and they were having the same argument that people with a $50,000 house and a $5 million house. Brothers and sisters act the same or nieces and nephews when they know there’s money involved. They always say, “We ought to this and that,” and all we ought to mean is you should, so I can get paid. What type of music were you into?

Classical. We played classical for fifteen years. We were doing things like Tchaikovsky and Dvorak, like the Nutcracker stuff. When you go to music school, there’s always a school of thought and what they want to do, and they were doing classical. I wanted to do blues and jazz. I wanted to do all that stuff. In music, we could have done anything, but we were into classical. It was fascinating.

Tell me what makes a bad client for you.

One that doesn’t respond when we’re trying to email them or call them. Another one that doesn’t listen to the advice that we tell them. One that doesn’t seem to want to grasp what we’re trying to achieve. That’s the whole goal. This is going both ways. This is not a one-way street. There’s a goal that we’re trying to achieve and we have to figure it out together. When we don’t have cooperation or participation, it’s hard to work with the client.

Other than the opposite of what you said, what makes a good client?

I want to be proactive. I love working with people that are proactive in what they do. They’re thinking through critically, “How do we do this? Where do we go?” They’re a client that wants to send the documents right away and respond to the emails. A big thing in our industry is being responsive or getting back to people. I’ve seen that. That’s a lot of what has made my business grow and scale has been responsiveness and efficiency. You can have all of that, but the one thing you have to do is execute, and I love that.

You didn’t describe a good customer for you. You described a good investor. The ones that are successful listen, follow guidance, lean on experience, and at the end of the day, execute. Foreclosure defense is something you said you had dabbled in a little bit after law school. It’s funny that you were foreclosure defense and now probate, it seems like you like to help people.

Yes, I do. I love that aspect of it. You get to see they’re so happy. A lot of these people are very confused and frustrated when they come to me. They don’t know what’s going on. They’ve never been through it. You have to realize that for so many of these families, this is the first time they’ve ever gone through something like this. When somebody’s there that’s able to help them, they feel so much more relaxed. They’re trusting and you want to help get them the next stuff.

It is so emotional and I’ve had so many people cry on the couch, especially once you figure out you can help. You mentioned driving for dollars. Do you have any tips or tricks for those that are looking for a way to drive for dollars or maybe find some inventory?

I don’t get into the driving for dollars category. However, there are leads out there that are great even right now with tax auctions, foreclosure auctions, and tax delinquencies. I don’t know how Texas is or any other state, but find states that are public records friendly because public records are amazing. I had one person tell me they’re from North Carolina and they find a lot of crazy, wacky deals, and they said they found something in Florida and they were going through the records.

They called me and said, “Al, your public record system down in Florida is amazing.” I said, “I know.” I hung up and I thought, “We have no idea what we have in our state about records being out there.” You can cross-reference death certificates with properties. You can look up tax delinquencies. There are so many opportunities for distressed properties.

I’m biased, but I believe Texas and Florida are some pretty great states. I want to give you a little bit of time for parting thoughts or parting shots.

Anybody that’s trying to get into more investing, that’s finding a hard time doing the buying with multifamily and a lot of this low inventory stuff, don’t shy away from getting into these other crazy creative title things. You may find it interesting or fun. There’s a lot to it. You may find there’s something that you want to work on that you weren’t going to do before, but now you love doing it, and you can become the expert on that.

Do you only practice in Florida?

I’m only in Florida.

Do you offer any consulting, training, or any of that?

The one thing that’s been interesting lately is I’ve been slowly making good connections with other attorneys in other states. Not necessarily probate, but finding good ones because I get people that’ll say,
“Do you practice in another state?” I’m like, “No.” They’re like, “We need to find an Al in our state,” but I’ve been building out this network slowly of somebody in Colorado, Georgia, South Carolina, and California. Slowly, the network’s building.

If someone’s reading this, how do they get in touch with you?

One of the best ways you can find me is online on Facebook under Al Nicoletti. My YouTube channel is under Al Nicoletti. Instagram at @AttorneyNicoletti. I can be found on Spotify, iTunes, and Google Play. You can find me on my website, www.AlNicoletti.com. The phone number is (904) 999-0053.

Al, first, sincerely, thank you for coming in. I know it takes a lot to fly a busy man like yourself. I’ve enjoyed getting to know you. I love your energy. I wish my kids acted that way. We live in a great country. There are a lot of things that people can be upset about, but at the end of the day, life is good. We get anything out of the effort that we put into it. You’re an impressive man. Thank you for coming.

Thank you, Tim. Thank you for having me.

Thanks for stopping by. Remember, your network is your net worth, and today, you’ve been growing both. We’ll see you next time. 

Important Links

• Al Nicoletti
• Al Nicoletti – Facebook
• Al Nicoletti – YouTube
• @AttorneyNicoletti – Instagram
• Spotify -The Al Nicoletti Show
• iTunes – The Al Nicoletti Show
• Google Play – The Al Nicoletti Show

The following podcast program is furnished by RCN Capital LLC.  The information provided is for general educational purposes only and does not constitute any legal, tax, financial, investment or other professional advice. The views, thoughts, and opinions expressed of any speaker are the speaker’s own opinion and do not represent the views, thoughts, and opinions of RCN Capital LLC.   No information contained in this episode should be construed as financial, investment or legal advice from RCN or any individual, author, host or guest. You should always consult a financial advisor before investing.

• Creative Deals
• Creative Investing
• Probate Properties
• Real Estate Investing
• Real Estate Strategies
• Recession Proof Investing