Situation: deceased owner city easement no taxes quit claim

[Matt Graham]

Here's the deal:I live in Houston, Texas and there's an overgrown half-lot (30x110') down the street from my house. 

I've been to permitting to talk about buildability, and it looks like after setbacks, I could build a skinny shipping container home or apply for building line variance and do something bigger.

in 1952, the owner signed a deed to the city conveying easment. The city continued a road over two adjacent lots, creating the half lot. The city still has easement, and because of this, they haven't been taxing the property at all! There is a 0 appraisal value and 0 taxes owed.

I contacted the city about buying the lot from them and they said they couldn't sell it to me because the original owner still has title.The owner passed away 40 years ago, but I got in touch with his 90 year old son who said he would give me a quit claim deed for any interest he had in the property for $1,000. He can't guarantee none of his relatives care about the property, but he said he was pretty sure they'd be uninterested.

The way I see it, I can do one of two things:

1. track down the 5-10 living relatives and ask them all to sign quit claim deeds, offering them a little cash for their trouble.

2. Use the single heir's quit claim deed to create color of title by filing it with the district clerk. Start using the land and then get free and clear title after the 3 year statute of limitation. (The statute gets shorter in Texas if you have color of title.)

Possible issues:

-Heirs coming after the property (seems unlikely. They're mostly wealthy people who live out of state)

-Never gaining clear title, never being able to sell, or getting the crap taxed out of me once Houston starts charging me taxes.Building some kind of rental property on the lot seems like the best way to make this profitable, but I have to have some kind of right to the property to get plans approved, utilities placed on property, etc. 

Will the quit claim deed from the one guy be enough to get plans approved?

And what about the city easement? Would I need to apply for this to be lifted before I started building on the property?

This seems like a risky deal, but a good one because there's someone who might have some title to the land who wants me to have it, the quit claim deed is so cheap and there are no back taxes.

Note: I do not have enough capital to fund a construction project immediately, but I could start the adverse possession statute of limitations by fencing and clearing the lot.

What am I missing?

What steps should I take?

Thanks!

[Bruce Lynn]

You need to have your attorney involved.  One who is board certified in real estate.  Quit claim as I understand does not establish ownership, it only establishes disownership....   Most title companies don't like these and may be hard to ever be able to get title insurance.  So tough to sell, except to another investor perhaps and no loans, although you could owner finance to the next buyer.   Then again that might be fraudulent if you don't have clear title to give to the new buyer.

I also really wonder if the city will allow you to build anything on a 30ft lot.   Lots of cities won't.   Is there anything around it on 30ft lots?

So even if all this could work out, then you get a 20ft wide house, which will look very odd I would think.  You have to pay cash for the lot, pay cash for the house and then have a difficult time perhaps selling it other than on owner finance and you risk not really being able to convey title to anyone which may open you to lawsuits.

I would think there are all kinds of better opportunities in Houston with lots less risk and better exit strategies.

You think there is little risk heirs don't call you?   I will tell you I get a fair amount of calls that start with.....I know my grandfather owned land in Texas and I now want to sell it.   Most of these calls are from CA and most of what they think they're interested in is in East Texas...but that's most, not all.   Most of the calls end up not making sense like this one.  It ends up being a $20,000 piece of land and there are 40 heirs that don't know each other and maybe never met.  Now you put a $200,000 house on it, and instead of $500/person it's worth $5000/person if they can get ownership of that back and it might be worth some busy bodies time to work on getting it back from you.

It may look good in books, but I would guess most good board certified real estate attorneys will tell you don't count on color of title or adverse possession laws to gain you title to the property.