3 property estate nightmare in Austin TX

[Ryan MacDonald]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $120
Sale price: $850,000

These were three properties owned by similar family members who all had unresolved estates, unpaid property taxes, code compliance liens piling up, and family members who were not amicable with each other. We were able to buy partial interests from each one of the individual heirs separately from one another who all had their own personal problems. We solved the problems for the family and ended up getting properties on the market for a developer to build duplexes. Total profit about $400K.

What made you interested in investing in this type of deal?

It had a large potential margin based on market values in a desirable area with relatively small unpaid property taxes. Also with unpaid property taxes, there is usually unresolved estates that I can handle easily.

How did you find this deal and how did you negotiate it?

I had two different wholesalers bring this deal to me. Each of them had different family members from different sides of the family tree who were interested in selling.

How did you finance this deal?

Our own cash.

How did you add value to the deal?

We resolved the estates for the families and brought disjointed family to the table to sell their interest.

What was the outcome?

After 2.5 years, we were able to buy 100% of the interest and then clear the unpaid taxes, code compliance liens and sell the property to a developer who would tear down the structures and build duplexes on each lot.

Lessons learned? Challenges?

The court system is gruelingly slow with all sorts of red tape and each heir was a completely different negotiation and had to be handled carefully.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with several attorney's on this process and a wholesaler who brought the buyer.