Updated over 6 years ago on .
Land Locked Lots with Extensive Legal Issues
Investment Info:
Other other investment in Canyon Lake.
Purchase price: $12,000
We purchased two vacant lots that were land locked before the tax sale from the owner. The property required getting a trust certificate made by the trustee, paying cash for the properties prior to the tax sale and now were are working on obtaining a forced easement to gain access to the main road.
What made you interested in investing in this type of deal?
It was a property going to the tax sale that had good potential value once and easement was obtained as it would likely be considered a commercial property.
How did you find this deal and how did you negotiate it?
We found it posted on the tax sale list. I originally called the owners and offered them $500 over payoff where they eventually said no. Then I had my partner call them pretending to be a different investor and they negotiated a payoff where it was worth the sellers time as they are somewhat wealthy. They simply didn't want the property anymore due to the extensive legal issues that came with it and their father's past.
How did you finance this deal?
We closed on it cash for deed with our own funds.
How did you add value to the deal?
We are reaching out to the old original owner with the criminal history (involving ordering a hit on his partner which occurred unsuccessfully, an IRS agent and the mail man). However they are not responding to demand letters asking for an easement. We were going to force the easement through lawsuit but just learned that we can request a plat and work with the local utility company to gain an easement for much less via eminent domain on the property. We will then rezone it as commercial.
What was the outcome?
We are currently working on forcing the easement via help from the utility company where we will rezone the property as commercial and substantially increase the value by about 10X
Lessons learned? Challenges?
We learned about forced easements and how to utilize the local utility company to not only get it done, but also have it done for less than a lawsuit.