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

1. 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
2. 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
3. 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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