The Right Broker Changes Everything, with Rhett Fruitman of Inherited Property Match

0:03 So, inheriting property can be stressful enough and we always talk about finding the right real estate agent to handle it who has experience and knowledge of working both with probate real estate and with the probate vendors and systems in our various states. Another layer is finding the right broker also with the right kind of property. And so we have we layer the geography, the probate experience, and the type of property requires really some hard work or guessing with the risk of mistakes or there's a service that offers that which is inheritedpropertymatch.com. I'm really lucky to have today co-founder Rhett Fruitman. Rhett, thanks for joining us today.

0:39 Thank you for having me. Talk about what was it the launch to the concept of inherited property match? There were several factors that went into it. So, on my personal side, after I graduated college, I went to work at Citibank in Los Angeles doing private banking. And at Citi, I got a good grasp of like what the wealth transfer is, what it looks like, and really just what it takes to provide a great service to your clients. And after working at Citi, I went to go work with my family. My family does two businesses. One is 1031tax.com which is a 1031 brokerage firm. And my dad helps people buy triple net property, but on the other side of it, he helps people sell any property all throughout the country called Real Estate Broker Match. And he helps his clients sell and then they go to a qualified intermediary and then they buy. So, I joined Real Estate Broker Match and helped, you know, modernize it, new technology, new infrastructure. But we quickly learned that almost all of our clients were inheriting property.

1:50 Right. So, we pivoted and we I started spending a lot of my day focusing specifically on inherited property and heirs have a full different set of needs, as you know, Bill, compared to the traditional property owner that wants to sell.

2:09 I think particularly when you talk about non-residential property, right? Because it's one thing to sell a house, you go to Zillow or Redfin, maybe, and find the right agent, even that's tricky, and there's some pitfalls. But particularly when you talk about non-residential property, you're really you know, you have different markets, you have submarkets, and you have sub product types and sub product types. So, talk about the unique challenges of inherited property when it deals with non-residential property.

2:34 Yeah, you're absolutely right that inherited residential is very different than inherited commercial. If it's inherited commercial, you have to wonder, you know, how does this affect the tenants? Is this an actively managed property? Is it an actively managed property that you have a property manager that at least things like should go to smoothly. Did the deceased property owner set up the right systems in place for when they pass away, the train keeps moving? Was it a one-man show? So, these are these are all factors. And then the other piece is if it's a larger commercial property, then you the step-up in basis threshold comes into play, and there's a whole tax side that comes into play, etc.

3:22 Right. And I think the issues of those properties, people maybe have a general concept if they bought and sold a house a few times, of the process. But the market process in commercial, or should I say non-residential, which include industrial, commercial, office, multifamily, is totally different than selling a house. In terms of the concepts, procedures, the systems. While the laws are, you know, governed by the same thing, the actual marketing and process can be totally different, depending on the market you're in.

3:50 For sure, 100%. It's a very different experience. How it's valued is different. There's no I'm going to go on Zillow and have my ego inflated a little. There is It's a lot more sophisticated and complex, for sure.

4:05 So, I often get attorneys who call me and say, "Do I know a Realtor® in this state to sell property?" And ask what kind of property it is. And because my podcast, I know people. But it's interesting how what small percentage I do get a hit on, right? I have I think 7,000 agents I've contacted in the time I've done the podcast. And even still, when I get a certain county, it's less than 50% of the time I have somebody I can refer to. But I'm glad to do it. You guys must have a bigger challenge as national, though you have the history of your father's business kind of behind you. Talk a bit about the process of getting agents kind of into your system, available for referral. What is it that you do? Do you have people who signed up and waiting for referrals? Are you Do you actively take a inquiry and then search and find somebody? What does that process look like?

4:52 Most of the time, we I would say it's probably around 50/50 if we've worked with the broker before. If it's a more niche market, we're more likely have to source a broker. If we're selling you know, like a very If we're selling a house in Los Angeles that costs $2 million, like that's a more standard transaction than

5:18 Right. You know, selling a condo in a much smaller city. But if we don't know someone, then it's reaching out to lawyers. Let's say it's in Atlanta, for example. It would be reaching out to lawyers in Atlanta, reaching out to mortgage brokers, reaching out to anyone in our network, seeing who they know, who they work with. But a lot of it just comes down to what the property owner is looking for. So, you know, if they're looking for a certain race, gender, religion, skill set, young and hungry, old and experienced, communication style, we're really looking to find the right broker that hits everything they need as well as a personality because you're really entering into a long-term relationship with them.

6:08 So, but half the time you say you have people come in your network. I imagine that's because most of the business is in the largest markets, right? Most would be in LA or New York you've done business with. And half the time you actually go out and source. So, talk a bit about those that you have in your network.

6:23 I was going to say I'll rephrase that because there is a distinction between commercial residential. For commercial, it's probably 90/10 and then for residential like it just it just depends. In a larger market, we definitely know great people.

6:42 Right. It also depends like if a broker lives in let's say Chicago for example, maybe they live in Buffalo Grove. So, then maybe like they could cover Highland Park. But there's like a circle of competence that like we only want the broker to like really be an expert in that specific area.

7:05 Right. Interesting. Now, when you inherit a property, are you dealing with them on a pre-inherited basis, meaning are you dealing with them when there's a probate filed probate in process and you're selling on behalf of the estate or are you selling exclusively once the probate is completed that they've inherited ed emphasize past tense the property?

7:27 It really just depends. It depends on when they get in touch with us. It depends on what they want. It depends on what they're legally allowed to do.

7:36 You know, if someone inherits a house through a trust, it's going to be a lot easier than navigate in California probate, as you know.

7:44 Right. So it depends how it's set up. It really depends. I would say primarily it is post probate or probates just avoided in general.

7:56 Trust. Yeah. And it depends like what the family wants too because especially for commercial a lot of times there's more than just one decision maker.

8:07 Right. So I find that almost always when you talk about non-residential property the property type that was appropriate for that decedent is not appropriate for the heirs. And that's not a knock on him. It's just that, you know, if dad was a full-time commercial Realtor® in the narrow niche of industrial space in the South Bay of Los Angeles County, California and his son, you know, is a tech guy working at Google in Santa Monica. He has no idea what to do with the property and it seems like almost always the best course is to sell it and then put it into and I know this is what your father does a triple net properties where they can keep it in real estate. They can, you know, deal with the tax consequences if needed and get a property to maybe already up and generating income. So talk a little bit about the options that inherited families have on doing the properties and where the triple net kind of properties fit into that package.

9:02 So a lot of times triple net fit in whilst the property owner is alive. So I'd say my father's traditional client archetype is someone that's between 50 and 80 years old that made a lot of money in real estate and is really tired of the constant upkeep and being a landlord and getting a call saying, you know, the plumbing is broken or someone's not paying their rent and because of the US tax code nobody wants to sell, nobody wants to realize their gains, and nobody who to pay the IRS money, you know, unless absolutely needed by law. And because of the 1031 exchange, what a lot of people will do is they'll own their initial property and then they'll 1031 into triple net. And these property owners can buy 15, 20-year leases from credit-rated tenants and hopefully they can get paid for the next 15 to 20 years. And maybe the tenant extends. If it's in a great area or if someone leaves, you can you can re- re- get a new tenant and you have another 20 years of guaranteed income barring bankruptcy. Post inheritance, it gets a little tricky. I don't want to give, you know, general I can give general, but I can't give specific advice.

10:24 It depends on step-up in basis, how people structure their estates. Right. Right. If it's under the threshold, a lot of people will just sell it and put it in the market, put it in real estate, put it in art, crypto, travel, however you want to spend your money. And it's a reset. If you're above the threshold, then a lot of people will 1031 into something else.

10:51 I find for siblings the 1031 in I mean, I'm not 1031, the sale into triple net property works in that the like you see the archetype owners 50 to 80, older, maybe some neglected. The market's changed a lot. Real markets changed a lot. Markets move. And so many of the properties kind of behind the times physically, behind the times in terms of the rent rolls. And rather than inherit a property and start a business they're not familiar with, they can just take the value, the equity and put it into something that gives them real estate, but gives them cash flow and it's managed professionally. It just seems like that to me has always been a kind of a winning option to present. I'm not one to make those decisions or get paid on those commissions, but I always encourage my customers take a look at this you know you want to be in property still here's a way you can play in the game learn a lot but you're not the guy making those decisions you have professionals who are leading the way. So let's go back to a little bit about the service of finding you know where do you find you're spending more time are you more looking for the right broker to match or you out spending more time getting customers attorneys who need great brokers in other areas or is your business somewhat equilibrium and you're busy doing both of them?

12:05 I would say both for better or worse I got the I would say the majority of the day is finding brokers in general sometimes it'll be from an attorney sometimes it'll be from someone that found us organically or a referral from other avenues but when someone wants to get in touch it isn't always easy to find the right person and if we don't have the right person in mind you know there's a lot of brokers out there and it's challenging to find who we believe is the great broker and frankly you know we're putting our reputation on the line with every broker we say.

12:43 Right. Right. So we don't want to look bad we don't want our clients to get bad representation Right. And yeah it's frankly it's a risk to vouch for someone.

12:57 Yeah it's a challenge and every time you give a referral you know I'm always hesitant and I want to always get more information from the person asking than they want to give me so I can get the right referral you know I get asked a lot more referrals for attorneys and for either state planning or probate and I want to know you know how big is your estate you know are there multiple heirs are you guys getting along you know what city is it in are you more online or do you need somebody to meet in person do you need high touch or not or can you work with a really great staff all these different They're all good. They're all bad. Depends on what, you know, what's right for the customer. And so, sometimes getting really clear on what they're looking for is really important. So, I'm sure you know, I'm sure like me, occasionally, you make a referral that sounds great, and the person gives you a great pitch on how good they are, and then you find out, and one thing that I learned early on when I started referring nationally in private business, was a lot of people who are really good at getting the referral, they're not good at servicing the referral. And there's these concepts of these teams and organizations where there's somebody in front, and they're just all their job is to get the inbound leads, but they just walk away from the deal, and you end up working with whatever new agent they happen to sell the lead to, or transfer lead to, or delegate the lead to. And that's not who you intended to business with, versus people who have systems and procedures, and while somebody does a lot like this my case, I handle the whole thing, but I delegate a lot of the activities, but I deal with all the customer interface and the attorney interface forever. How do you How do you kind of flush that out? And, you know, you talked a little bit about your system to I'm sure something you work on and try to improve all the time, but, you know, what are some of the things you've done to find successfully the right agent to work with?

14:37 So, I think one core distinction that I have versus a regular property owner is that a property An agent looks at a property owner, unfortunately, this is just the case, they look at it as a single transaction. They're like, I'm going to sell their house, I'm going to make my commission, I'm done. And you know, they want to do a good job, and they want to get a referral from that property owner, but the incentive just isn't there, unfortunately. We're in a very luxurious position to be in because the broker wants to make us happy. The broker thinks, "Oh, if I can get Rhett's client a great a great outcome, and they're happy, then Rhett's happy. And if Rhett's happy, he'll continuously send me more business." So, the relationship that I have with each broker is different because theoretically, like I'm relatively young, I could work with a broker for the next 50 years.

15:32 Right. So, we are playing the long game. I would agree that your question is totally fair and that it's a real concern of am I going to be working with the A team or is the A team just trying to convince me and are they just great at marketing? Do they have a nice website? Is are they like a schmoozer? And those are all legitimate questions. We're not We're not When we're looking for someone, we're not just like on Google, you know, seeing who has the best SEO and who has paid ads.

16:03 Right. So, a lot of times if a lawyer is vouching for someone and we get we speak with five people, part of it is we just know what to look for and what to ask also. But naturally, like we come across better brokers because we're getting introduced to them from quality sources.

16:25 Well, I'll say I think one thing that you and I share I don't know that you know this is important, but you know, I think it is that you're making the contact personally rather than just delegating it to technology. And I think while there are plenty of coaches and gurus and AI experts who would say this whole matching process could be done via an AI bot of some sort, chatbot, you know, when I when I reached out to your company I do all the time when I see a vendor that I think can service my clients or provide value for my business, my client's business, I reach out personally. I send an email, I'll call. Doesn't mean that they're going to answer. And then if they call back, I'll engage with them. If I just get the chatbot back, you know, that I'm not going to want to work with it. Doesn't matter. There's no chatbot good enough to be worthy of my time today. And so I know when I reached out to you called back. And immediately that said right away, "Well, this is a guy who understands that you can't replace that conversation. You can't really replace that human interaction. And I think that's the distinction that you're making. I've seen I've seen a number of these of competing schemes and maybe the reason why you know, they don't make it is I think they don't they try to delegate the one thing that's important, which is the relationship.

17:37 Thank you. I appreciate that and I think that in the world of AI and automation and all these tools, like what really matters is knowing that I'm working with someone good. They know that they're working with someone good. And if someone calls me any day, anytime, like they will have my undivided attention.

17:59 Yeah, and I think the AI is great. I use it every day all day long. Helps me not do stuff I don't want to do to free me up to talk to people, but if you're using the AI, I see so many real estate agents emphasizing these chatbots for incoming texts and incoming emails and incoming phone calls. I'm thinking So, the last thing I wanted is a And then their numbers and conversion numbers are like you know, 2%. They got 100 leads and they convert two. Like well, who wants to be involved with you know, 100 conversations where only two do anything with you? It's because they're sorting through a bunch of garbage to find the one or two that are good. So, again, hats off. I understand it's a big operation and you guys are growing in national scope and it's complicated, but the fact that's personal, I think is really important. So, if you had to if you had a magic wand and could tap the last real estate broker that you did pick who didn't do the job you expect them to do.

18:52 They did not do it. They did not do. They didn't perform. What's the one thing that you would get them to do or consistently that you see if they fall short on?

19:02 Well, number one, to prevent the mistake in the first place is to is to really vet them and to tell them exactly what the client wants and what their expectations are. And something that I do, let's say I speak to a client and I know exactly what they're looking for, I'm going to go out, I'm going to talk to five, 10 people. I'm going to figure out who I really feel good that I'm willing to vouch for. But I'm going to tell that broker like, this is exactly what they want and this is what they need. And you know, maybe they need someone that will just give them the undivided attention. And number one is I have to be very clear in my communication and like just really set the expectation of this is what it is required. And if they're not able or up to do it, that's fine. I appreciate the honesty. I would say the unfortunate reality is like not everyone in life is super reliable and dependable. And a lot of people, you know, they have things going on in their lives, but a lot of property owners say, you know, I'm paying you a lot of money. Yeah. This is a big deal. Yeah. And you know, we have to we have to get this done right. So, I would just say setting better expectations with everyone and really ensuring whoever we pick is up for the job.

20:23 You know, I'll share with you the last time I made a mistake on a Realtor® I was working with, it was a woman who you know, we have a checklist of what they agreed to when they take the referral of all the procedures of how we want that property marketed. We discussed before we agreed to it like, okay, we don't have to do this, we have to do this. And then we signed it. We both agreed, here's what you're going to pay and here's what we expect you to do. And this one lady, she only could hold the open houses on the weekend. Now, I have to say in this market, if the house is vacant, we want to hold it open during the week. That's really where serious buyers go to work and they're off at 5:00 or 6:00 and the second spouse can stop by or drop off the kids pick up the kids at school and stop by on the way home or something. So, it's important that it's available. She's going to do it on the weekends and then one week she couldn't do it, and the next week she couldn't do it because it was Mother's Day weekend. And I said, "Ho, hold on. I understand Mother's Day. Okay, everybody understands you can't work on a Sunday. It's Mother's Day, and you're a mother, or you have a mother. Okay, no problem. But, the Saturday before is kind of weak. In our market, and now I'm Jewish. I don't work on Saturdays, but unless you weren't Jewish, that's the open house day here in LA. That's the day they're going to hold it open. You we can't not hold the house open for 2 weeks because you're not available. They're paying us a lot of money to sell the house. And in this case, you know, for this woman, this was a big chunk of her annual income. I personally do a lot of business. It wasn't it's not going to make a difference to me financially. It's my pride. It's my reputation that's important. And so, sometimes I find, particularly with newer agents, and they're hesitant to tell you that they're part-time, they're hesitant to tell you that they're struggling, that they just aren't as committed to the business as they need to be to provide the service the customer needs.

22:03 For sure. I mean, something I have the luxury of seeing is my dad works in real estate, and my uncle, and my grandpa, and all of my other family, cuz I'm also Jewish. So, everyone works in real estate. But, something that I've been able to see is I've been I've been very fortunate to have the pattern recognition of like what it takes to really succeed in it. And you're absolutely right that people don't set the expectation, and then, you know, they have a couple jobs or a side hustle, and if you're not 120% in, you're not going to you're not going to

22:35 No. No, it's so interesting. People with these side hustles today that they're they think they're moving forward, they're just moving backwards. I'll never forget I used to film my podcast on Thursdays 4:00 to 5:00, and then there was a real estate conference near me. And if business was good, I would treat myself and get an Uber there rather than drive there because save parking and whatever. So, like a little bit of a treat. And this guy's driving me to the conference, and I talked to him he tells me he's a part-time real estate agent or he's a real estate agent full-time part-time Uber driver. I'm thinking well, that's not really how it works, but and they I said well, what are you doing to you know, build your business? I'm going to this conference tomorrow. I said well, I'm going to the best real estate conference in LA. That's where you're driving me. It's free. I'll get you a ticket. Why don't you just park the car, come in and hang with me and I'll show you what's going on and I'm all excited to try to help this young guy. Oh, no, I'm going to one tomorrow, which means he's going to drive to in this case LAX, park his car, spend bucks. The some conference is just going to sell him some stupid coaching program. And it's almost like they get sold some real estate agents get sold a bill of goods and don't understand this is a business. At the end of the day you're taking some of his asset and you're maximizing it for them and then you get a little piece of the money by solving their problems. This isn't a game.

23:52 Totally. And the bigger part is you're selling someone's asset and especially in the inherited property situation you know, someone's net worth could 100x overnight.

24:03 Yeah. And these are not like little transactions like it's people's livelihoods at the end of the day. Yeah. Yeah. Yeah, and I think the other thing I've noticed is that now in my case you talk about inherited, I'm almost always doing in probate or trust or litigation as opposed to kind of the fan you know, it's a trust property and those are you know, they're almost like regular transactions in the process. And a real agent who really does trust and probate litigation they brag about their problems. Like you had one of those? I had one of those and we had this problem versus the ones who complain about problems. They don't understand we get paid to solve customers' problems. So.

24:44 Okay. So, talk about the attorney part because at some point if it is in probate or it is in litigation it's almost like you can't get paid, you hitch your wagon to that attorney. And I've learned also that you know, if the attorney is in trouble in the beginning, you might not get paid. You know, it might just drag on for a long time. So, talk to a little bit about when you have an inherited property and there's not an attorney attached, and the easy one is attached, do you get involved in searching out probate attorneys and how do you vet them and find the good ones?

25:15 Yeah, we work with a lot of probate attorneys in all 50 states. It's not our core expertise. Like our honestly our core specialty is through finding brokers. Fortunately, if we've worked with people in the past, like for example, my most of my family lives in New York, right? So, if I don't necessarily know someone, know a great attorney, I really have to do the same process. So, maybe I'll speak with a broker that I know and then say, "Hey, do you work with a good probate attorney?" Or it's essentially a re-interviewing. I would say it's roughly 50/50 if they already have an attorney. It just depends on like what stage. Cuz some people reach out to us and like really need the full 9 yd of advice. And then some people are like, "I'm at the 1-yd line. I just need to find the right broker. Let's sell it and then I'm done."

26:12 Okay. But yeah, we work with attorneys in all 50 states. And there's sometimes they need probate advice, sometimes like post-sale they'll they're looking to set up a new trust cuz they've just had this ginormous windfall. So, yeah, no two situations are the same, but we do work with attorneys, though.

26:36 Well, look, we're coming up on the end of our time here. I really appreciate being able to learn more about your service. I think seeing that you've kind of piggybacked on or added bolted on to your father's business, which was semi, I guess, a national referral network of a important niche that doesn't apply to everybody, but anybody in the business has been around 1031s. Anybody's in the business has been around probate, so you're really talking about something that's a core area. Rhett, I really appreciate the chance to meet with you and talk to you about your business and what you guys do. If you want to learn more, the website is inheritedpropertymatch.com. And he has a little button on there on how it works, and you also can get a broker match if you're looking for that. And there's contact information down below, phone number [phone number]. And if you don't get that cuz you're driving or something, reach out to me. I'd be honored to make that introduction. Rhett, thank you so much today for sharing with us not just your service, but I think more importantly kind of perspective of what it takes to find those good referrals when we need them in other markets and how to receive them as well. So, thank you so much for your time today.

27:36 Thank you, Bill. Appreciate it. And for the rest of us, thank you for joining Probate Weekly. We do new episode every week, usually with probate attorneys, but also vendors to help us be more effective in serving our customers. At the end of the day, that's how we get paid is having happy customers, whether we're an attorney or a real estate agent or vendor. If I can help in any way, I'd love to get your comments. But reach out at Bill Gross Probate in social media. As always, make today your best day ever. Thank you.