How I made $300,000.00 in 13 Months - MAKE MONEY Part 2
At first, with our limited knowledge and experience, we were getting the job done; by the end of the buying rush in 2006, we had fine-tuned our buying and selling to run like a well-oiled machine. Be sure to read each article to find out just how we did it.
In Part 1, I began telling how my husband and I embarked on the ride of a lifetime, making $300,000 in only 13 months. We had a partner in this business endeavor who made half of the profit, so in reality, we made our little 3-man company $600,000 in 13 months.
I ended Part 1 telling about how we found out that land was being bought in Hot Springs Village, Arkansas, and how we sold a vacant land lot we owned for about $5000 that previously was not even worth a few hundred dollars. Now, land was suddenly being bought by several different buyers. This caused my husband to want to buy land in the Village and then immediately turn around and sell the land to make a profit. And that's exactly what we did. In just over a year, we bought and sold about 150 lots.
We found out that each month, Garland County Courthouse and Saline County Courthouse (the counties of Hot Springs Village) held foreclosure auctions in which the Hot Springs Village Property Owner’s Association was foreclosing on for back POA dues. At each courthouse, these lots were selling for hundreds of dollars, but could be sold to new buyers for several thousands of dollars. Each month, any where from 8 to 25 lots would be foreclosed on.
Hot Springs Village—the largest gated community in the US, measuring 16 miles by 6 miles—was full of land with delinquent POA dues. It didn’t take long for my husband to see the possibility of endless dollar signs. Our partner agreed to provide up-front money needed to make this thing work.
Buying Foreclosures or Buying Directly From the Land Owner
Originally, we planned to buy land from HSV POA at the foreclosure auctions, but to do that meant that we would be bidding against several others who had already caught on to what was happening with Hot Springs Village land. My husband wanted to know if there was any way to find out who the property owners were and to contact them before their property went up for auction. It could be a win-win situation. These property owners had already received notices that their land was to be foreclosed on and were expecting to lose their properties. Surely, it would be a pleasing thing for them, we thought, by us contacting them with an offer to purchase their properties before the foreclosure date.
Finding Property Owners
We looked back at the Sentinal Record, Hot Springs’ Newspaper. Each foreclosure notice was listed in the Classified Section under Legal Notices and included the lot, block, and subdivision of the property and the owner’s name(s). We wondered, how do we find these people?
So, we took a visit to the HSV POA office and simply asked. We learned that property records are public records available for anyone to view and were shown several very large books that contained 287 subdivisions, each property ID's lot and block, each owner, and their addresses—well, at least their addresses when they purchased their land. Many owners did not live in Arkansas; some owners had moved many times since purchasing their lot 20+ years ago so the records we had were very outdated. We had our work cut out for us. And I began learning the intricate work of what’s known as skip tracing.
Online Phone Directory
I learned about two very important websites: anywho.com and zabasearch.com. Anywho is simply an online version of a phone book. It lists only current, landline phone numbers. Search options include: last name (mandatory), first name, street address, city, and state. (Just for further information, a reverse phone number may also be searched on Anywho; typing in a phone number will return results of the owner so long as it’s a listed landline.) I learned to start with searching for their first and last name and the state they lived in when they bought their properties. Many times, my search was over at this point. I would give my husband the phone number and he would call the people and make an offer on their land.
Many other times my searching for a property owner had just begun. If the search turned up no one, I would then search for the person’s first and last name but leave the state option blank. This worked well when the property owner had a semi-unique name; it did not work well when a name like “John Smith” was searched. There was no way to call all the hundreds of John Smiths in the United States.
Cross-Referencing With ZabaSearch
Then, I found ZabaSearch.com; a site which not only includes current names, addresses, and phone numbers, but also includes past addresses and phone numbers. I started printing out lists from both Anywho and ZabaSearch and cross-referencing them with the POA records. It was tedious work and I loved every minute of it. Sometimes with one piece of property, I might have 20 or more different contact details written. My husband would then faithfully call each one, in hopes to find the real property owner.
Many times, the original property owner was deceased and my skip tracing turned up loved ones to whom the property had been willed. Other times, the property owners had divorced and I may have found one of the divorced owners. We also found properties not owned by a person at all, rather owned by a Trust. It is here we began to learn about Quit Claim Deeds, Living Trusts, Revocable Trusts, and all the other sticky issues that surface with buying real estate.
My husband and our partner had some experience with real estate so I quickly learned from them how to get all the paperwork together for our first closing with the title company. We were nervously buying our first vacant land properties in Hot Springs Village, purchasing them on our partner’s line of credit. And, through working with our real estate friend I mentioned in Part 1, we already had a buyer for each property we were purchasing. Although we hadn't yet earned a single dime, our new venture was getting even more exciting!
In Part 3, I will tell you how we learned to buy and sell a property at the same time, without needing any up-front money whatsoever. Our business endeavor just keeps getting better….
- How I Made $300,000.00 in 13 Months - MAKE MONEY Part 1
Ive decided to tell my story of how my husband and I --average, middle class people -- made $300,000 in 13 months during 2005 and 2006. In reality, with our almost silent partner, we made our little...