1,000 posts - Time to say thanks to all the BPers!

[Jason Hirko]

Hey BP! I just noticed that I have posted on here 999 times. I originally joined the site to promote my lending business, and have gained some incredibly awesome clients from it, but soon realized that the wealth of information and advice of everyone on here was much more valuable! I have done numerous deals in the past - I bought my first rentals in Portland before the Financial Crisis, and then moved to Texas after the hurricanes in 2008 and 2009 and bought up all the HUD houses on the gulf coast I could. I then got in to apartments, commercial developments, historic renovations, etc. All well and good, but nothing too out of the ordinary as far as closing a deal is concerned.

But it wasn't until a couple of months ago when I ventured into what would be the weirdest real estate deal yet, and I cannot tell you how much I have relied on the information on Bigger Pockets to navigate this. I am closing on it next week after clearing all the hurdles one deal can throw at me. So for that, THANK YOU! 

So here is the deal:

I know, not much right? Just a rundown old industrial building... Or so I thought every time I drove by it. Well, I found out that the local school district is building a new Middle School directly behind this old red gem. I looked up the tax records on the abandoned property, and sure enough, they were a year behind on their taxes. The mailing address is in Florida, to some company that went defunct years ago. First search through BP - how to find owners that don't want to be found. After letters, calls, skip traces, etc., I finally got the owner's daughter on the phone. What she said was great news to me: I'm sure my dad would sell since he's in default on the mortgage. I asked her if she would check with her dad if they would sell it for their outstanding debt and let me know. They called me back and said yes, but there's a catch. The property is owned by a corporation that just stopped filing tax returns. And the owner that I had been talking to was 99% owner in the corporation, but was only a limited partner, so I had to track down the 1% owner and general partner as they were the ones that could really sign then contract.

Back to BP to try and understand what I was dealing with (before the first of numerous calls with my attorney!)...

Fast forward a few weeks - we find the GP, get the signature, and we're off to the races. Except the owner of record with the county didn't match the ownership documents as there had been a subsequent stock sale in the company. We track down the old owner, get him to sign an affidavit releasing any potential ownership in the company, and get ourselves a fully executed contract!

Or so we thought... 

It turns out that when the property was originally parceled off from the old cotton farm it used to be, the old cotton farmer was as sly as a fox and put a Right of First Refusal on future sales in the deed. Meaning the old owner could buy it for what we had it under contract for! Back to BP! When we got the title commitment, this exception referenced a document that was not included in the paperwork from title. After a call to title company, we were told that the actual Right of First Refusal document wasn't scanned into the county's online system. After a frantic drive to the courthouse, we found the recorded document, and to our EXTREME relief, read a Right of First Refusal document from 1997 that lasted 20 years and expired January 1st, 2017!

We now have clear title!

Then the call from the School District's contractor - they ask us if they can use the property to park equipment and as a temporary entrance because the school is building a new road directly on our property line, and putting a stoplight on the highway. Now our property is a hard corner on a lighted highway intersection?? Yes, please!

And then we start thinking - let's just catch up the mortgage and take over the payments. Subject-to deal? Back to BP! The owner says 'Sure I don't care - the mortgage isn't guaranteed by me anyway - I have just been paying someone else's note all these years.' In fact, we find out that the property next door is put up as collateral on the property we are buying. We contact the owner of that property, and he says that he is willing to sell too, but can't until our property is unencumbered. We end up making him an offer on his property contingent on us paying off the loan on the original property we are buying. As of today, no response, but it could turn out to double the goodness of our deal!

So now we have an awesome property for 35% of the original mortgage amount (and maybe two) that we'll close next week. The seller is happy to not have to worry about this hassle anymore, the county gets their taxes, and the bank doesn't foreclose. Everyone is happy! So if you have read everything I have said, you know I am incredibly appreciative of the Bigger Pockets Community. 

Thanks for reading this and thank you for all the advice!!!!!

Jason