How We Turned Our First Messy Deal into a $60K Profit - Despite Everything Going Wrong
In this episode, we break down our very first distressed property deal - a challenging transaction that taught us crucial lessons about navigating complex ownership situations, dealing with occupants, and the importance of having multiple exit strategies.
What started as a seemingly simple $500 acquisition turned into a four-month journey involving multiple parties, aggressive negotiations, and eventual success.
Key Highlights
- Property: 1+ acre infill land in gentrifying area of Houston
- Total Investment: ~$50K
- Sale Price: $195K
- Net Profit: ~$60K each for both parties
- Timeline: 4 months to close
Deal Breakdown
- Initial Situation
- Three brothers owned property (25% each)
- One brother's deceased (three children with 8.33% each)
- Two brothers living on property in poor conditions
- $35-40K in back taxes due
- Property heading to tax sale
- Key Challenges
- Occupants living on property
- No direct communication methods (no phones)
- Multiple failed negotiations
- Family interference
- Had to pay significant taxes to stop sale
- Turning Point
- Draft lawsuit as leverage
- Final cash offer + partnership structure
- Creative solution involving all parties
Key Lessons
- Importance of early assessment of occupancy situations
- Value of multiple exit strategies
- Power of legal leverage in negotiations
- Significance of proper deal security
- Balance between persistence and knowing when to walk
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Episode 6