my biggest air count is 65 and it was a $1.2 million track of vacant land in Austin I bought it all in with delinquent taxes for 250,000 and we literally sent people across the state with cash and deeds and notaries and aggregated all the interest over a couple month period and ended up netting about a million dollars when it was done I just sold it at Market but it was literally 65 people we coralled my monthly legal bills are usually about $50,000 on average and I was ad I was told in a deposition last month that I'm a plaintiff in four 30 lawsuits at the moment this podcast episode is brought to you by land caller land cold calling designed by land investors for land investors go to land caller.com for more information hey there everyone and welcome to another episode of the Jack boss show I'm super excited to host today's shows with Logan Fulmer and Logan is a very experienced real estate investor uh does 30 to 40 million worth of real estate deals every single year has a team of 20 people came from The Fix and Flip world but also does a ton of land deals and really one of his Specialties is dealing with distress properties and with title issues so we're going to jump into that deep today and really talk about well how do you get distress properties how you solve those issues and and how do you how do you deal with some of the distress uh with distress and title situations that you come across welcome to the show uh Logan Jack it's a pleasure all right wonderful good to have you here um let's jump right into this so tell us what you do and tell us why in the world you like uh complicated title title uh man Jack thanks for having me you know you built such a a special program a great following and you have an incredible reputation in the space so that's why I really wanted to come particip so thanks for having me um you know distressed real estate wasn't something that I intended to set out to do like a lot of people but um I just kind of found my way there and today I'm about 10 years into real estate I'm 43 next week um a husband father four kiddos oh thank you yeah 43 I'm halfway there um you know father of four kiddos um married to their mama uh just you know we built this business for the last 10 years together and um we've got about 20 folks in our office today and um distress real estate is a big part of our business we talk about that today you know that is a big in that's our ordinary income stream and after that we put pretty much all of our money into um an industrial portfolio and then large Land Development deals that we sell to builders but the heart of my business is distress property acquisition and I got there when the market CH started to change from its last low and competition was going through the roof and I couldn't make any money without doing something different yeah that's that's what happened is he started 10 years ago that's 2014 that's right after uh you said 10 years right that's right after the the big dip and then yeah just around that time is when when when when prices in most Markets started to really take off and and competition with it started to really take off that that's about right so uh so then so in essence you're saying that distress property is where a lot of people shy away from because it's they want to have the lower hanging fruit and they're shying away from the extra step is that right that's right investors want good cheap fast and distressed property is cheap but it's not fast and oh I mean easy cheap and fast yeah and it's not easy it's cheap it's not easy and it's not really fast yeah no I'm with you I mean on the land side of things I um I probably I I used to like to say you're probably equal to that there's there's not a whole lot of people and you're probably one of them uh that that know how to solve title issues as as good as as as I do and you're probably equal if not better so there so let's talk about the what is what does it mean distressed property what what falls into the category a lot of people originally when they hear when they originally hear the word they think a house that's beat up up and has deferred maintenance and needs repairs and that is true but when I say distressed I mean title paperwork a property that can't sell through a traditional title insured transaction if it can't pass muster there that falls into the problem title that's me right and why what what what makes a property not being able to pass through the traditional kind of uh kind of situation Title Company what what what are some of these things lots of owners feuding owners missing owners judgments and leans that out value the property breaks in the title chain um Miss yeah I I always call those um I go blank at the moment of course but unresolved Estates or orphaned Estates yeah yeah like I like I I remember one time we got a deal with 64 heirs tent company didn't want touch it and we actually let it go tooo we we didn't we didn't pursue that I was like that's we too much brain damage for me and the profits was not much so we're like let's let go to the state and then eventually it'll be refurbished back into the things so okay so so how do you go hold I've got to tell you my biggest air count is 65 and it was a $1.2 million tra of vacant land in Aus I bought it all in with delinquent taxes for 250,000 and we literally sent people across Ross the state with cash and deeds and notaries and aggregated all the interest over a couple month period and ended up netting about a million dollars when it was done I just sold it at Market but it was literally 65 people we coralled yeah that I mean then it is worth in our deal we would have made like 20 grand and we're like I'm not chasing 65 people 30 grand and and we we pursued it a little bit but then very quickly we realized that 15 of them nobody knew where they are and we're like just the search cost for that because you can find them you can find them if they're dead then you get a death certificate but then you're dealing potentially with airs uh that that blows it up even more you're like no skip pass thank you but at a million dollars it's a different deal I mean if at the end of the day you make a million dollar profit that's that's really cool so um okay so let's let's go deeper into that so distress property distress not from a point of view of like it needs rehab like if John Smith and G Susie Smith own their house and they just have neglected it in their hoarders this is not this is a distress from a rehab point of view but it's it's not a distress title property so you're referring more to distress title properties where there's something with wrong with a with a with a title where there's something that needs to be fixed that requires some kind of like digging up of people extra documents from people and things like that and then and so so let's some let's let's go into some War Stories what what what kind of stuff has you have you seen in that well I'll tell you the the first one that I did like this was by mistake so this is part origin story part War Story I was working in the oil field and I was investing my money in infill lots in San Antonio 10 years this was about 12 years ago when I started buying um and I was just these Lots were cheap infill and I remember thinking I can buy a lot for5 or $10,000 that's big enough has utilities at the street and it's big enough to put a house on it I thought this is a good bet because there's probably no place or time where the value of that goes less than 5 or 10 grand cuz you can build a house on it and it's in a big city so I spent everything I'd saved in the oil field a couple hundred thousand I picked up a couple dozen about 26 27 of these and the market really started to change at that time and I got laid off for my job I sold a couple properties and recapitalize and I decided I'm going to be a real estate guy at this point but at this point my first property I was offered $200,000 for and I was only in the whole portfolio for $ 250,000 so that told me this little East Side really explode in value and I'm on to something so I had to liquidate a couple of them to get some cash in my pocket to you know pay my bills when I got laid off and I remember one of the properties that was one of the higher Valu on I was getting ready to sell I went to the title company and title report came back and I owned 1 18 and I remember this was one of the very few that I bought without insurance all of them I bought with title insurance and this one seller is being aggressive and I'm on like my 18th acquisition at this point and he says I'm not fooling with title I'm not doing all that just come bring me the money and I was feeling frisky that day and I brought him a check for 5 grand in a deed and that was the deed that changed my life last of this guys right so it became a nightmare for a moment because you don't know what to do but then uh that solving that problem gave you a skill set that oh now made you an expert and allow you to make money where other people only see problems is that right bingo so I went back to the market and tried to buy more of these properties but I realized they were all worth a 100,000 or more now the vacant lots and I thought oh darn the honey hole it's over with but I was also during that summer spending time paying a lawyer and he would tell me what step to do next go buy the next Deed from this person oh now they've got a child sport leane have to go negotiate that with the attorney general all these steps and after that deal was done it was still great margin deal I sold it for 125,000 I was all in it for like 15 or 20 and instantly I remember thinking there's a bunch of property that has these problems in this side of town and when I went back and looked through the ownership and the tax rolls I realized these are the ones that haven't sold yet maybe there's a shot to go do this intentionally and still be able to get the low purchase price of three years ago but in the current environment there we go like like I we my wife like say I want to give credit where credit is due Michelle always likes to say that these are plot twist moments of your life you know like how in a movie like how in a movie there's like something and then then there's a Twist and the plot and everything looks like it's falling apart but then it turns into a blessing disguise and then out of that the Phoenix Rises and everything becomes beautiful well that's kind of a plot twist moment of your life because you're like came came into a deal made a mistake like didn't do proper title search screwed up gave this guy five grand and ended up being an eighth of the property and then realized that oh now I have to work so did you solve that deal did you get the other s eight I bought it all one at a time yeah one at a time how much did you total spend to get those when it was done I was all in for like 15 20,000 range I started off offering people 500 bucks a piece some would want a little more some of them had leans and a few people just gave me their share for nothing because they had Lans that were up there yeah so then so then you have that done and now you go back like H interesting this is like this is how for example I discovered one strategy that's uh that we call the exus proceed strategy that in many states if you if you if you let if a property has enough back taxes uh it goes to to auction but if you let it go to auction the in some states the person who had the uh who who owed the property taxes at the time it went to auction if it if it goes above above what was back open in back taxes that person gets gets the overage and we discover this by accident by buying a property two weeks before an auction without Title Insurance just getting a deed um not paying the taxes and then um and then it went to auction and we thought crap we lost the property and then we duck to the to the title to the to the state statutes and found out that we have a claim for like wasn't much but it was a claim for like $7,000 they're like great like we only paid 100 properties are like great let's collect on $7,000 and then we're like huh if that happened by accident how about we do this on purpose and we started actually finding properties that are very short before that that that we could buy just before the auction we would still Market them and see if we can sell them but if nobody would buy them we just let them go to auction and then drum up even some support at the auction so that bidding goes higher and then collect the overage afterwards so uh there are some really cool ways it's it's again it's those plot twist moments that you did that so fantastic so then how many deals uh so so so then you started obviously if you have to deal with those things different situation every single deal very quickly you become an expert in that right that's right you know you brought up the excess proceeds I've got to throw something in there we had a similar event not quite like that but similar and when the aha moment happened with us we found a a deal coming up quickly and we weren't sure how to solve the last part of it so we purchased the shares that we could but the last few shares were just unable to be resolved and we just let it go to the sale collect the excess proceeds and now that's our back stop as long as we get it before the order sales issued we'll buy shares even if we know the title problem is not solvable if we can get enough equity and then we'll file a motion to as an intervener to be added as a defendant and then let it sail very similar we think a lot Al like in those regards yeah yeah or you can even attend the auction and then bid it in a way yourself up there and like buy it back and so on as long as it that because at the auction it cleans up all the leans are so I mean there's some restrictions around there but uh but still very cool uh so that's one strategy finding Lots with multiple owners diseased owners things like that where the owners currently don't know how to solve that and then uh get those deals and it works for lots and it works for houses this is not just uh we're talking about land because you like to do land land Lots but it obviously also works for really any kind of uh piece of real estate out there so in what kind of Cate categories have you done kind of these kind of difficult closings pretty much every category I bought warehouses I bought Apartments I bought nice houses crummy ones folks come to me sometimes and say I want to buy X asset class how do I do that with distress and I ask them to step backwards and say don't do that if you're looking for a certain type of asset in a certain location in this kind of condition and with distress it might take you years and you don't have that kind of time I recommend you shop by distress not by asset class no bad product only bad pricing just get it priced right and when you buy it if it's not what you want just sell it at Market make a bunch of profit use that money to go why what buy what you really want I think we're really thinking alike because that's when when people always come to me it's like I really want to buy that buy that that lot overlooking this mountain in this neighborhood how do I get that for 20 cents on a dollar it's like chances are you won't and chances are it's a million dollar lot and you w nobody's going to give that to you for 200 Grand so what you need to do is you need to make a million dollars with our standard strategies and then go contact the owner and offer market value and go pay you own your lot it just you're still using the profits from your business by using by doing by doing low value by by doing deals where you make a bunch of money in between but you're not but but nobody can give you guarantee you that your dream lot or your dream house is going to be available at a discount you just you still effectively bought it at 20 cents in the dollar it was just all these other properties at 20 cents in the dollar and rolled it proceeds wise into here exactly right exactly yeah right yes and uh yeah so doing doing exactly the same thing um good so what let's let's do it kind of a category of like uh categorize some of these different difficult deals which one do you typically find the easiest ones to cure the one I see the most common is multiple owners you know life is just life is life you know we're not all born in the household stay in the household stay connected to folks and as families grow and as you have human life problems they split up I find probably 60 to 70% of these deals are only multiple owners who just either don't get along and like each other don't know about each other or were unaware that they were in air of an uncle's property that's more common than any other now there's about a third of them that are the judgments and leans the breaks in the title chain the Lost trust certificate all those things but really if you can locate people and you don't have to bring them together you can deal with them separately because they don't like each other the research the conversation that's to me the most important because that solves 70% of your problems yeah makes sense now um do you ever come across some that are just like outrageously greedy and basically like oo I'm your key to making a bunch of money well I want all that money and how deal with those I have three solutions the first one is you pay them I had a a man who lived in Peru who owned 30% of 1% of a property his share wasn't worth much but he demanded $20,000 now I'd purchased a $250,000 property for about 70 or at this time I was in it for $50,000 so had tons of equity he wanted 20 grand far more than his share and he held me over a barrel but in this case it still made sense to me so I just paid him the 20 grand um the other option is I tell those people that I'll get back to them and I go deal with everybody else and I leave them to the very last and almost everyone of these properties have title def or have uh delinquent taxes so I'll then pay the delinquent taxes and in Texas and many other states they're Equitable reimbursement um case law so I go to that person and say you own 30% the 10,000 in taxes that were owed I paid those so you owe me 30% of those taxes you owe me that reimbursement so need to pay me that $3,000 and if you don't I'm going to sue you and for close on your share of the property so would you like to make a deal or would you like me to take your share after $10,000 in legal fees that's one option then the last option is power Right Bingo and the last option is I've collected Equity along the way I will never overpay for a share unless it's the final share or final shares in this case I just say dude you own 1% and you want lots of money let's just go sell it at Market together I'll get my 99% or my 90% And you get your 1% or 10% of the proceeds that's it and you don't have to worry about me negotiating you down you get your fair Shake if you won't agree to that we'll file a partition lawsuit and a judge will sell it and then you'll be responsible for legal fees which means you'll net almost nothing so if you agree with me and just sell you'll get your fair share so partition is that third way so it's agree and sell with them sue them or overpay them all right and then typically when you explain it to them they mostly they usually agree yeah such a large I mean if you're going to be in this business full bore and at a real scale you got to be comfortable with litigation you know monthly I'm my monthly legal bills are usually about $50,000 on average and I was Adis I was told in a deposition last month that I'm a plaintiff in four 30 lawsuits at the moment so you get to build an internal docket that's you know fairly robust uh it might actually pay off for you to hire your own lawyer at this point if you don't already have that yeah that's about right um one attorney that works for me full-time in the office the other four are experts in certain things like probate or whatever I've got one of them that's a creditor type attorney and we do a lot of we buy judgment and leans we'll purchase them we'll negotiate them we'll strip them so we have the different Specialists but the main generalist is for me all right very cool uh and that that'll probably save you a bunch of money on the legal fees too there uh very very cool so interesting kind of things here so guys if you're listening to this or watching this it's really fascinating how many niches you can be in in real estate so we know that people a lot of people do like high Equity they do mortgage delinquents they do probates they do all this kind of thing but everyone wants as you said everyone wants easy fast and and lucrative and you just going after the hard slow and lucrative because uh because in in many cases those are also there's a fourth kind of thing because the easy fast and lucrative are usually not as lucrative because they have high competition ah but if you go after hard slow you have low competition and therefore you actually have lucrative it's like like I I like Michelle and I again we talked once in a while it was like when we started out most cities again we do land flipping most counties had a very rudimentary website and some had very already very Advanced particularly State of Florida had very Advanced websites already the State of Arizona Mara County were Phoenix had a really good website a couple of other counties had really good websites but down south there were a couple of counties that literally just had this 1995 static website with a bunch of phone numbers and that's it so if you wanted to get there was no data service that had land there's no data service that you got anything from so if you wanted to get any information the only way it was get in your car drive two and a half hours south book in a hotel room there on Sunday night take a day of vacation on Monday go in there micro fish one wow after the other but you know what those were the counties we made the most money with there you go nobody else in the world is willing to do the extra step yeah absolutely so in essence what you're doing is extra step Investments you know today if a person would be listening to this and listen to my organization size and scope it sounds very complicated and sophisticated a lot of folks would say oh my gosh that's just too much I'm I don't even feel like I want to try that because it sounds like the hurdles are too high but the reality is it's actually the opposite yes there's a fraction of this it's Ultra complicated and you it's different but when I started doing this I was literally looking for ownership problems and Code Compliance leans and delinquent taxes and after about a year and a half half I I had an epiphany all the properties I was dealing with were all delinquent on taxes every one of them and I realized it's so much easier to look by delinquent taxes because that's a high motivator then I'll find lots of title issues and the ones that don't have the issues I can't get the discount so I won't negotiate those really the ones that have the problems I'll then negotiate the big discounts on and 70% of those are only finding people and getting them to agree so when I was doing this by myself the first couple years I maxed out between 750,000 and a million in net profit that was me and a secretary that's it and I didn't know my head for my butt I had a lawyer that would help me and I'd hired a private investigator and that was it so it really is I mean I might have been one of the higher producers for that but even if you cut that number in half a solo person looking after messy tax delinquent deals just aggregating owners maybe with the help of an attorney some is a very low barrier to entry yeah so what do you the think the number one skill sets that you need to to go into that kind of Niche the top two three skill sets you know ration and logic are probably high priority in the ability to negotiate and make people kind of like you early on when I was telling people what I was doing they would say that's so risky you don't have title insurance and you don't know if you're ever going to be able to get all the shares these things and I remember thinking y'all guys think this is risky if I'm buying a 50% share of a $100,000 property that's 50 Grand in equity if I'm only buying it for $5,000 or $10,000 I have 40 Grand in equity that doesn't seem risky to me it might take me a while to get my money back out of it but a lot of Investments are like that to me it was ration and logic that allowed me to get there yeah it's a there's some risk tolerance there because uh because if you um if you can't get the majority together then you are somewhat restricted in what you can do with that so you potentially do have some money tied up that you can't can't get Beyond but then also as you build start building some volume it becomes a little bit of a num game y like talking to uh like this morning we did a we did a webinar and we had one of our Mastermind members there we have a mastermind for the very experienced uh real estate uh for very experienced land entrepreneurs um and and he has just made a million dollars on an entitlement deal and um he was talking about that it took him six months to get this thing to entitlement and he had to spend about $100,000 with all the drawman and the thing and the fees and the stuff and so on so forth and a lot of people might say well that is risky well but therefore he made a million dollars and over if you look at it if you do and and I again just making a case for business thinking and which is the same case I think you're making that that if you're thinking of course if you spend 100 Grand you don't have most people don't have 10 batches of 100 Grand to spend on something but if nine out of 10 deals are successfully entitled or nine out of your 10 deals are successfully done and one you don't get to the Finish Line then you're making nine times of in the entitlement world making nine out of 10 times a million dollars and one out of 10 times it cost you 100 Grand and you get nothing for it no brainer that's a pretty good risk too that's a a very asymmetric risk kind of uh relation that you can make $9 million and lose $100,000 that's an $8.9 million profit likelihood I'll do that any day of the week right and are you thinking B basically similar kind of way that in one deal every once in a while you get stuck with something and then and you can't get the remaining shares until 5 years from now and and but in nine out of 10 cases you do or what's that ratio in the first place well I like where you're going with that and I completely think the same way you do if those odds could be had in Vegas you'd borrow get every dollar you could and take it and put it on red you know in this case though early on I knew that if I couldn't find those last shares or couldn't negotiate with them an attorney local attorney was telling me for between 10 and $20,000 I can do a partition lawsuit and the judge will force the sale and I'll get my Equity out of it that way so I never looked at it as I can't get it solved I just thought as long as I have excess of 20,000 in equity I can always get my money back out of it in nine months all right so talk let's talk about that for a second partition sale judgment or how how was that called explain what that is so in Texas it's section 23 of the property code it's partition of real property and we also have section 23A which was amended in section 23 was amended in 2019 to add section 23A it was a uniform partition of airs property act so it has some different triggers in there for appraisals and Commissioners and whatnot but in summary you have the absolute right to access your equity in Texas and the pro the partition uh law the partition um statute was in place for big rant is they would partition it partition doesn't mean sell it means cut it into pieces basically so usually when large track owners would fight they would go to a partition lawsuit the judge would appoint a land commissioner or a surveyor and they'd cut it into pieces and divvy it up Jack gets half Logan gets half or Jack gets a third Logan Gets a third and Jenny gets a third but it gets tricky when it comes to houses that's where the land will be sold or the house will be sold because you can't cut a one acre infill lot or a house in half um in Texas you'll spend between 10 and $20,000 depending on if it's contested or not it'll take six to 12 months you get your money judge will order it sold beautiful I mean that's and what you said the minimum you have to have for that is 25% there's no minimum you need greater than zero perc so you could own 01 now this typee of lawsuit is used on the East Coast when developers want a property to sell the buy 2% and force the sale and then they'll have a straw buyer go buy at the auction that's not us we're looking to make an exit so as long as you have any share now for us we need to have a great enough share of equity to make it profitable yeah to make worth spending 20 grand on on this piece yeah that that makes sense that that triggers how much how much Equity you should have but worst case scenario you can you can at least get rid of the land get rid of your ownership and and and so on okay very cool and then there's always the back offer of like letting it go to tax sale and collecting the over it yeah U if you do that and that again depends on which state you is in tax lead states that doesn't work and only works in tax lead St uh so important thing you're talking about taxes so make sure audience if you're listening to this make sure that you actually check how those rules are in the state that you want to do business with guess I can imagine the social Republic of California is doing that very different than Texas oh you know what else that that brings up another extremely interesting point tax lean or tax deed matters also equally as important is is it a probate or an Affidavit of Airship State okay if it's an Affidavit of Airship State different states called different things small estate affidavit whatever affidavit Airship that is in lie of probate if a will was not left or if a will was left and not probated you can do an affid of Airship that's a statutory form where a couple people sign it with an owner and you file it and it points to all the errors but if you're in like Florida or California you have to do a probate you have to have a personal representative and an Affidavit of Airship can point to the Airs of 10 dead people in Florida 10 probates yeah and those are important things to do so before you jump in there it's like hey let me find all the people with like 65 dead people in there on the deed make sure you do a little bit of research on there but it's beautiful to talk about this because um we have never had a guest that talked about these kind of particular things like we have done plenty of Affidavit of airships also in Arizona called Affidavit of succession you can use both of them uh many times like somebody inherited the the property from Dad or from Mom and and it's worth $30,000 and they the limit used to be $50,000 it's higher now uh you simply have them fill that thing out fill out the form with $170 send it to the county courthouse 6 weeks later you get uh the the the probate is complete and you can buy the property from the person that's still alive so very easy very very very simple process most people just don't know that exists so make sure you look at it you Google those things small estate probates and things like that and then uh you'll learn very very quickly what works in which state uh with that said I just wanted to make sure that what what Logan is describing Works beautifully in Texas Works in many other states too but you got to look at the legality of the on the ground in that particular state wonderful thank you very much uh I think we're coming towards the end of our session here so uh I know you have a big team you have thing but you also offer some educational services around these kind of uh different things that you do tell us a little bit about what they do and how people can find you I'm glad you brought that up Jack thank you um I've got some online courses that talk about all of the title defects why we go look for them how we identify them what we do with those you know they're four to six hours of curriculum um but once a year I do a sizable event usually about 500 seats and it's eight hours of my business model what it takes to go from flipping or wholesaling into this full-time if you want part-time if you like and the ins and outs of this and I bring my whole office and it's a fun day um and then outside of that we do coaching it is limited to 50 people a year there are two rounds of coaching per year it's 25 people and 25 people we don't ever take more because I want to give good service um but it's easy to get to put my name Logan Fulmer into Instagram and you won't miss us all right sounds good well with that said thank you very much for being on the show with us uh that is a wrap I really enjoyed this talking about the title issues because after having done 5,000 land deals I can tell you we found we found I don't know like thousands of deals it's very you very very common that we actually have to tell the tile company what they need to do so that companies like I don't know how to close this it's like do this this this this let me check with my manager they come back two days later you're right this is exactly what we need to do and then and then we close we close we close the deals but it's fun because like power knowledge is power if you know how to solve these problems these problems turn into minor hurdles and just little just turn into a check checklist of things that you need to do you do the checklist boom you unlock all this value in those properties that people are willing to give away just simply because they don't open the internet they don't start researching they don't spent a few hundred on an attorney to sometimes get an answer of what need to do them or they hire a stupid attorney which there's plenty of those too and uh and they just don't know what to do if you have that experience if you learn that it's really cool so check out uh Logan check out his his Instagram check out his uh what what what he what he does with that set thank you very much that's a wrap as always give us that five star review uh share it with your friends and I'll see you in the next show thank you very much bye-bye