All Forum Posts by: Ryan MacDonald

@Aaron Gordy that's great you were able to do that. Usually dealing with people in prison has been an easy process for me. It's finding them that can be the hard part. I've found if you put some $ in commissary for them to get things going and tell them they can receive funds as commissary as soon as you close, they get with the program quickly.  I've probably dealt with over a dozen incarcerated individuals and once I stated I'll put money in their commissary, they reply with "When can I sign?".

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.

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. in total, This estate had about 25 heirs with interest ranging from 1% to 50% in each of these properties.

Once we picked up all of the interest outside of the last heir, we learned that the last heir was a minor who inherited their position in this property from his father with an unresolved estate. We came to an agreement to help establish a guardianship with the heir to resolve the estate and to be able to purchase their interest. In the end, COVID coupled with local municipalities extended the process so much that by the time July 2022 came around, the last heir was turning 18 and could finally sell. We purchased the last remaining heirs interest in each of the three lots on his birthday and were able to make the property marketable for sale.

We took these properties no one could solve, and solved the problems for the family and ended up getting three great properties back on the market for a developer to scrape the homes and build duplexes on each lot. Total profit came in just shy of $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.

I'm currently looking at acreage inside City Limits with an opportunity to develop but the problem is that the property is in a flood plain.  Does anyone have any experience coming up with creative ideas for acreage located in a flood plain?  I know the city won't allow for development of homes/mobile homes in the area but I'm curious if anyone has come up with other creative ideas?  One thought was to do Truck Parking or possibly do a Taco Truck park. Any other ideas anyone come across? An RV park came to mind as well as there are existing slabs from the previous mobile home park that was there before it was forced to close due to the flood plain, but I am not sure that it fits the local demographic for that area where the land is located as I don't see many of the locals having RV's to park and store. Looking forward to see what some investors might have come across.

First I am not an attorney so please don't take any of my information as legal advise.  Please consult an attorney for your specific needs.  That being said, I buy a lot of distressed real estate and partial interest of distressed real estate in Texas when it comes to substantial heirship issues and families are fighting. I typically will buy the undivided interest from heirs that are willing to sell their portion and then work on the remainder afterward.  

I am currently working on one now where the original owners had three biological children and three adopted children.  The original owners died without a Will, thus all children (biological and adopted) receive equal shares of the estate. Now one of the adopted children died without a Will and did not have any children of their own.  I understand that in Texas, an adopted child can inherit property from both the adopted parents and the biological parents.  What I am trying to figure out is if this can also go the other way if an adopted child's share of an inherited property would be divided amongst their adopted siblings as well as their biological parents or siblings?  

I believe the adopted child's share is equally divided amongst the adopted siblings but I'm not sure if the biological siblings become involved or if there is a split in % passed down as there is with half siblings receiving 50% of what a full blood sibling would receive.  Would anyone help shed some light on this?  I can't seem to find this in the Texas Estates code.  Any help would be greatly appreciated.

Investment Info:

Other fix & flip investment in Conroe.

Purchase price: $20,000
Cash invested: $32,000
Sale price: $155,000

Contributors:
Logan Fullmer

This was a land locked 6.5 acres in Texas. It was part of an old partition deed from the 40's but it was the last parcel furthest away from the road. A neighbor owned the 6 acre parcel next door and the 10 acre parcel across the street but a poorly indexed easement allowed us to build a road through the middle of their property. We tore down the neighbors fence and built a 500 ft road to our property line in order to give us access and then we sold the land to a realtor on MLS.

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

It was a land locked parcel and we were confident about our purchase price and being protected should we hit a road block.

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

A wholesaler brought us this deal as we have been doing a good job letting others know that we buy property with dirty titles and land locked properties in Texas.

How did you finance this deal?

We used our own cash to finance the deal.

How did you add value to the deal?

We purchased for 1/3 of CAD value but felt that the value would be significantly higher if/when we get access to it and a road.

What was the outcome?

We were able to get access through the neighbors land and build a road. When then sold it on MLS to an investor who was going to develop the deal.

Lessons learned? Challenges?

Challenges as always are managing construction crews and timelines. We were delayed several months because of extensive amounts of rain prevented the crew from being able to perform work on the land. Also, after the road was built, there was a heavy rain that came and we had to rebuild a large portion of the road that was washed out during the rain.

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

Yes I worked with a local agent to help us sell the land. His name is Jason Franks and he is in the Montgomery County Area with Top Gun Realtors.

Investment Info:

Other fix & flip investment in Conroe.

Purchase price: $20,000
Cash invested: $32,000
Sale price: $155,000

Contributors:
Logan Fullmer

This was a land locked 6.5 acres in Texas. It was originally part of an old partition deed from back in the 40's but it was the last parcel of land that was chopped up furthest away from the road. A neighbor had acquired the 6 acre parcel next door and the 10 acre parcel across the street and built a fence at the end of the dead end road that was about 500 ft from our property line.

We found a poorly indexed right-of-way easement that cut through the middle of their property that gave us access to the dead end road. We noticed the neighbors that we would be tearing down their fence and building a 500 ft road to our property line in order to give us access. The conversation didn't not go over well. Needless to say, we were well within our legal rights to do so and ended up building a 500 ft road that cost us $32K and several months due to rain postponing the work schedule. We ended up getting a no option contract on the property and sold it in January for $155K.

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

It was a land locked parcel and we were confident about our purchase price and being protected should we hit a road block.

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

A wholesaler brought us this deal as we have been doing a good job letting others know that we buy property with dirty titles and land locked properties in Texas.

How did you finance this deal?

We used our own cash to finance the deal.

How did you add value to the deal?

We purchased for 1/3 of CAD value but felt that the value would be significantly higher if/when we get access to it and a road.

What was the outcome?

We were able to get access through the neighbors land and build a road. When then sold it on MLS to an investor who was going to develop the deal.

Lessons learned? Challenges?

Challenges as always are managing construction crews and timelines. We were delayed several months because of extensive amounts of rain prevented the crew from being able to perform work on the land. Also, after the road was built, there was a heavy rain that came and we had to rebuild a large portion of the road that was washed out during the rain.

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

Yes I worked with a local agent to help us sell the land. His name is Jason Franks and he is in the Montgomery County Area with Top Gun Realtors.

@Brandon Kingcaid I guess it depends on your strategy. If you are having to use FHA to buy a property and your mind is set in that I would probably focus on a duplex or triplex but I know local prices are pretty darn high. And with FHA, your barrier to entry is lower but you should assess the risk. If we are at the top of the market, then buying at the top with little to no money available could leave you upside down in a market correction but I suppose you can ride it out for the long term, especially if you live their. Also, depending on your current lifestyle, if you are able to rent the adjoining rooms out to friends, that improves your situation.

I’m a bit skewed in that I don’t buy anything that does not have some form of financial or title distress which allows me to capture immediate equity at the time of purchase. Buying a new build doesn’t necessarily allow for that and you are basically banking on appreciation and cash flow. If you can push up cash flow by renting one side and your spare rooms then I think that can be a viable option to live mortgage free, get some mortgage pay down and some cash. However I think any appreciation you capture will be long term. It’s possible, just slower than I like.

That being said, if you can buy something in distress or in an area that allows you to get better cash returns like a San Antonio, I think it might benefit you a bit more with less risk. It will be more work but you could see better returns faster in my opinion.

@Brandon Kingcaid I actually live in NB and it is a more expensive market. As Seth mentioned, you aren’t likely to get any real equity on a new build. You can find a few opportunities if you look around but I’ve found the NB tends to be higher priced. You can likely get better returns on rental properties as you go towards SA. I don’t do much in NB because prices are a bit higher and thus risk and return on time and $ spent isn’t where I like to be.

@Linda Hastings is it at a specific time? I’ll try to make the next one.