I Couldn’t Be Happier About Making (Almost) $4,000 on a Land Deal
In our real estate investing business we shoot for a minimum profit of $9,000 on vacant land deals. Some are way more than that. So why was a $4,000 profit deal (really $3942) so great?
Deal Story
We decided to try out Ohio this year, in part because NC is moving toward more stringent regulations on wholesaling real estate, and we wanted to hedge our bets.
We started with vacant lots in the major cities and found the market to be very different than NC for vacant land. We struggled a bit with pricing and seeming lack of demand.
The lot I’m writing about, the one we closed on, is a tiny lot in an urban setting. It is a 0.05 acre infill lot, 25′ x 100′. We met the seller through text blasting and we got it under contract virtually for the whopping price of $1522.
We struggled to get buyer interest and we were unsure if we’d be able to sell it and were on the verge of cancelling, when one of our tried and true disposition strategies came through for us- Neighbor Letters!
Whenever we get a vacant lot that has low interest, we send letters to the neighbors to see if they might want it- bigger yard, keep someone from building next door, etc. It’s amazing how many deals we end up selling to neighbors! In this case the next door neighbor wanted it, and he was our best, and only offer at $6,000.
So we got this deal under contract on May 14th and we sold it on June 10th. Not bad, inside of 30 days. so why did it take another 2 1/2 months to close? Dang! And there were no title issues. The buyer had a realtor, who was slow as molasses, difficult to get ahold of, and generally dragged her feet for weeks and weeks. Maybe it wasn’t a big enough commission for her. Thyen she steered us to a title company who also dragged their feet. A title company who took weeks to get title work done. Laughable. And they call themselves World Class.
Bad title company, bad, bad title company
The final straw was the title company sending us an estimate of costs. They had us paying about $2700 in closing costs for an AB/ BC close. (The agent told us that we couldn’t do an assignment, which wasn’t true). I pushed back on costs and they knocked of maybe $100 or $150, basically nothing.
Weeks later, the title co. finally had the title work done and they scheduled a closing date, like a week later. LOL. Then they pulled what my son would call a douche move. The y sent us a settlement statement at 4:30 pm on friday for review with the closing scheduled on Monday. Basically trying to corner us into accepting their ridiculous fees. I pushed back, but of course I got no answer until just before closing time on Monday, They knocked off a tiny bit more and had us paying around $2500 to close. I had enough and said no, get us under $1500 or we’ll go elsewhere. They still attempted to wait us out, hoping we’d succumb to the pressure of having buyer and seller ready to close that day.
White Knight title company, and where the wins stack up…
Instead I reached out to two other title companies. The first one couldn’t be bothered to talk to me to take in my business, and I moved on. At the second company I found an amazing rep who responded to my email within 5-10 minutes and said she could close the deal on Thursday, 3 days away!
She also said that she would switch it to an assignment and save us money. She did exactly what she said and it was white glove all the way- she communicated promptly and well, got title work done quickly, got all documents out in a timely way, scheduled a mobile notary for the seller, and closed the deal in 3 days! The other title company couldn’t do it on 2 months! And here’s where all the wins come in…
Wins From This (almost)$4,000 Land Deal
- Three day closing. Three days, wow!
- Profit $3942 (Profit had we gone with the 1st title company: ~$2300. A difference of +$1600!
- Closed our first Ohio deal! After a long uphill slog- persistence paid off.
- Found an amazing title rep who we can work with going forward- a blessing and a gift!
- Stuck up for ourselves and did not let the 1st title co. bully us into closing with their fees. Said no to them taking our profit in the form of junk fees.
- Ended a drought of closings that we’d been in- our last closing had been over a month prior to this one, and we’re used to averaging about 4 a month. Sometimes it can feel like you’ll never close another deal when you’re in a drought, and closing one can prime the pump for more!
Moral of the story- shop around if you think you’re not being treated right.
Lesson learned- Take the reins earlier when a title co or attorney or agent is dropping the ball, don’t let delays and errors compound. We could’ve lost this deal to delays. Thankfully the seller was patient with us and extended twice, and the buyer was committed.
I’m super grateful for this $4,000 profit on a wholesale land deal!