How to transfer $5K

What I’m thinking: We have been the most “feeling good” land deal since we entered the industry (which is a lucrative reward).

Almost break our 8-month championship nightmare

In the second half of 2024, we started to reach an seemingly simple East Texas deal…and then quickly evolved into this The most confusing title situation I’ve seen it.

“Direct” may be a touch. The package is intersected by the county line, adding to the complexity of jurisdiction, which is a real estate transaction, but the seller appears to be the sole title holder of the organized family document. Two local ownership companies were unable to get their underwriters to cross the finish line with unknown family records (e.g., last name in marriage certificates in the 1920s (!!))

By the way, this is after we have spent $3,500 on the investigation, and we regret it based on the title’s clear assumptions.

At a purchase price of $110,000, capital risk is too important to us to consider the underwriting title on our own, so as Hail Mary, we contacted the most professional messy title company in Texas and still spent months figuring out that.

In the process, sometimes I am ready to write off our hard costs and keep moving forward. Our land investor partner deserves great credibility here – he spent a lot of time doing genealogy research with the seller to find the documentation he needed.

Finally, after 8 months of back and forth, all that remains is the seller signing the closing document. On the day of the closure, the seller called our land investor partner and said in tears that he needed to reschedule with the title company and then blind us.

It was an amazing turn as the seller has been working together, eager to end the months, helping countless family members sign various heir affidavits.

At the time, our hard work cost was about $5,000, and the market has been deteriorating since we started the deal, filling it with boundaries at best. So whether we are going to walk or it is possible to invest further in legal remedies, we must weigh it carefully.

I’ll cover how we deal with this situation in detail here. It can be said that the seller is back at the closing ceremony and we officially closed earlier this week.

Total Cost: ~$118K. Plans list less than $260Kbelow the market, may not be at the worst selling price of less than $200,000.

7-day turnaround: From Ghost to $230k Cash

A few days after we acquire ownership, our land investor partner will hear from the seller’s family to indicate that he is interested in purchasing from us.

I called my family and he said:

“I can’t really believe this property is for sale. It has a deep family history. If I knew, I would have contacted my cousin to solve some problems.”

If it is not clear from the above: even if he knows that, given the extremely complex title work, and the fact that two local champion companies have given up clearing the title, he has the chance of ending the deal close to zero.

Although I hadn’t realized the seller’s family background before, it was obvious that they were African Americans and the property has been in their families since slavery. They were initially part of the plantation that their families took over after liberation. We are talking about nearly 200 years of family history.

(Note: I debated the above and given how hot the ultimate race-related hotspots are, I think the seller’s family history is crucial.

I just sat there silently, letting him tell his story, trying to figure out which room could be used.

He provided $200,000 in cash to get it out of the market.

This is lower than what I’m willing to consider. We haven’t even tested the market yet, and I believe our Comps below are priced at $260,000. But I can tell this guy that there is a serious emotional attachment – cash buyers who can be closed within 30 days worth listening.

After discussing with our land investor partner and waiting for a few hours to see if a potential buyer will come back and pin himself higher, I sent him this exact text (and an email to him for increased visibility):

“Hi, sir (name), it’s Chris, we talked about (address) attributes.

Discuss with my partners, we understand the meaning/history of the property for you and your family and hope you can get rid of it.

If you can meet us in the middle for $23,000 in cash (30-day closing), then we are willing to sign a contract before reaching the market.

We can give you until noon tomorrow until CST so you can sleep on it and call whatever phone you might want.

After that, given how long it took us to buy the package, we will start actively marketing it.

Don’t worry, if it doesn’t work for you, just want to give you a choice and feel free to call me.transparent

Emotional acknowledgement, specific numbers, hard deadlines (but not crazy pressure).

At 8:30 am the next morning at 8:30 am, he called me, thanked for the proposal, and then fought back for $225,000.

I firmly know that $23,000 is the lowest we have to consider before we go public, and Tell him that if he wants to reach $230,000, I will sign a contract today.

Then I was silent. Our BATNA is excellent and we think it will perform well in the market. (Also, will $5K really become a deal breaker?)

buyer:”$230k, OK Chris, let’s sign.transparent

I had the buyer verbally locked in before calling our broker. Then, as we brought our own buyers, I increased the renegotiation of the Listing Committee from 6% to 3%, and we acknowledged all the work she did in the past few months. She easily agreed-we were all paid very quickly. Super hard to obtain, easy to handle. I’ll take it.

Expected results: Distribute $100,000 in net profit with our land investor partners. Eight months of work, but only about 30 days of full capital deployment.

This is the “feel good” part – the property has kept the ride with the family for generations (the title is clear) and we get reliable returns to reward our detailed durability. I won’t forget this story anytime soon.

5 lessons created in one week for $100,000

1. Solve problems that others will not encounter. No wonder why several land investors pivot to merge their business with cluttered title deals (we want to provide more money!). The market is more difficult. Low-hanging fruit is hard to come by. Creativity and durability lead to survival.
2. Avoid the difficult costs of using it until the title is clear (and where possible). As mentioned above, we regretfully promise a costly investigation into the assumptions that the title will be clear. Sometimes it’s a balance, because surveys and other field trials can have a wide timeline, and you have to weigh the urgency of the seller indicating a closure.
3. Acknowledge the emotions behind people’s desires. The buyer has a clear and obvious emotional attachment to the property. See how I respect text messages. Without a strong language, we both returned to the negotiation table. No wonder why we can achieve mutually beneficial results?
4. Communication rewards. As mentioned above, even though we locked in the buyer ourselves within a few days of buying the property, we did not try to work hard/squeeze the broker. In addition, she quickly prepared a contract and took over Title Co. Logistics, which adds to the professionalism and trust that most buyers appreciate in our experience.
5. Never count your chickens until they hatch. du! While we would love to accept buyers with their promise (especially for buyers deep in the property, as mentioned above), we will not shortcut any contractual requirements. We need to submit EMD and proof of funds to the ownership company within a few days after the contract was signed (both buyers sent to both companies).

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Looking for reliable funds in a “messy title” deal? Severe land capital has an increasing expertise in solving the chaos creating a competitive advantage in tough markets, and when the heat of iron is iron, we have patient capital reserves to strike.

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