Now, exactly what is “The Kelly Plume?” Well, as it turns out, the “Kelly Plume” is a region of land that has been affected by chemicals used by the Kelly Air Force Base to clean and rebuild jet engines. A toxic chemical used by the air force beginning in the 1950s (a practice that ended years ago) had been steadily soaking into the ground and had affected a water table some 80 feet below the surface. Over the years it had spread. It had permeated out under numerous neighborhoods throughout the Southside. Apparently it was gaining some media attention at the time. They wanted me to sign off on a disclaimer and, more specifically, newspaper articles that proclaimed this as an EPA hazard. Needless to say, I was heartbroken. I stopped signing papers and the deal was left dead on the table. I sited “Undo Duress” as my reason for not closing because there had been no mention of this in the events leading up to the closing. Nobody argued my reasoning.

I called David to tell him of the unfortunate events. As you can imagine, he was heartbroken as well. After all, he was a day away from receiving a nice paycheck for his entrepreneurial efforts… now all was lost. None the less, David was a consummate Pro. He took the change of events in stride and agreed that I had done the logical thing by NOT closing the deal. I was relieved that David understood because the last thing I want to do is sign up for a deal and not close. I’ll say it again, David was a consummate pro.

It took me a day or two to get over the loss. Never letting a deal die easily I began to rationalize the prospect of going ahead with the deal;

1. I could build the homes at a cost of $60,000 total investment (Land Included) and sell them with a disclaimer acknowledging the Plume. It was a reasonable thought because I could actually reason with potential Buyers that the city did NOT use that water. Every Restaurant, YMCA, School, Hospital and Household in the region used water piped from a completely different source. In fact, the only way that specific water would be a problem is if someone actually drilled a well that tapped the contaminated water. People are not going to drill a “private” well in an inner city which offers clean water at the spigot. The deal was still over stressed. I would have too much money invested to take that kind of risk.

2. I could buy the lots and sell the lots ONLY. If I didn’t have to build a house on the lots I would only be into each building site for $8,000. I could possibly sell the lots for $15,000 each, but still, it didn’t meet my “Risk Reward” comfort level

I did my best to consider all options, but as far as I was concerned, the deal died at the closing. There was nothing left to do about it. Having to sell with a “DISCLAIMER” was too much. The financial liability was too great.

I can’t tell you how many days past after that, maybe a month or two or three, but one day I got yet another call from David. He told me that t

I had been experiencing some success building little 1,200 sq. ft. houses on scattered lots in and around the Southside of San Antonio. I liked the little business and the partner I was involved with so I decided to crank it up a notch or two. I decided to put out the word that I was looking to buy some lots. What is the first thing I do when I decide to “PUT OUT THE WORD?” I go to my computer and start sending out some well thought out messages.

I have taken great care to collect an extremely large amount of email addresses pertaining to the RE community in my market. Today I have over 6,500 realtors email addresses and another 600 email addresses of RE investors. All of them actively involved in RE in the San Antonio area where I live and work. Because I have learned to network among these email addresses I am reasonably famous in my town for doing what I do… Investing! It is the “BIG FISH in a SMALL POND” kind of syndrome but that’s what you need when you’re searching for deals.

On this one particular day I decided to hit my entire Investor List first. I normally don’t like to send out more than 250 emails at a time but I was really, REALLY eager to buy some lots and I had all my time freed up to do just that. I honed a message that looked like this;

ATTENTION INVESTORS Mitch Stephen is looking for scattered lots to build small, affordable houses on. If you come across unwanted lots in the lesser parts of town, I am interested in speaking with you about them.

The lots must be at least 4,000 Sq. Ft. The lots must be at least 50’ wide.

I am ready to buy today!

Mitch Stephen 210-669-4020 Mitch@Homes2Go.NET

Within about 5 minutes I had constructed the message and sent it out in an email to the 600 or so investors in San Antonio. Now, I’m going to take a little “side step” here and use this paragraph to drive home a message to all of you out there;

Were else in the world can you hit 100s – even 1,000s - of people in your direct market with a personal message within 5 minutes for virtually FREE??? If you think I’m a bit over the top when I get excited about Internet Marketing? …well that is why! There is no other effective way to reach so many in an instant. So many of the investors I know out there are missing the opportunity completely.

Now, where were we… oh yeah…I was trying to buy some lots…

With my email campaign delivered I figured I’d have some lots in inventory within a week or so... and I was right. I didn’t pick up as many as I’d hoped to, but I did have 3 on the hook right away. I was buying lots for $8,000 to $12,000 each. They were standard lots of the minimum size; 50’ X 100’. It was a fair price… not great but not bad either.

I used the same message but modified it for Realtors. Compared to the INVESTOR COMMUNITY the realtors are a bit touchy… Sooooo, when it comes to the realtors, I methodically send out 250 realtor emails a day instead of hitting the entire group at one time. Let’s do the math;

I have about 6,500 realtor email addresses, I send out 250 a day, I don’t have to create a new message for 26 days. Actually it’s even longer than that because I don’t send out emails on the weekends or on Holidays. Why don’t I blast all of the realtors at once? I actually spread it out for several reasons:

1. I don’t want to create more leads than I can respectfully handle. Nothing will hurt your business faster than asking for help and then NOT responding when help calls you. Even if the deal is a complete loser you need to respectfully decline. Imagine a person holding out their hand to shake hands with you and then you decline to extend your own hand… that is what it is like if you don’t respond to an email that has responded to your request.

2. I don’t want to beat my list of realtors up everyday because they’ll soon request to be “REMOVED” from my LIST. Nobody likes to get hit with an endless barrage of mails day after day. YOU don’t like it and THEY don’t like it…NOBODY likes it!

3. I want to stay in front of my network every 2 to 3 weeks with a viable message. By presenting myself every 2 or 3 weeks I have a better chance of staying in the forefront of their minds. TOP of MIND AWARNESS is what I want to accomplish. When someone in my network runs across a deal, I want them to think of me.

4. Some realtors in the community tend to frown on an investor if they think they are available to every other agent out there. I don’t know why that is but it is true. When confronted with agents that want me to sign up with them “exclusively” I always ask them, “Dear Mr. Agent, could they live with only ONE client? If they don’t understand where I’m coming from after that question… I move on without them.

HINT: It works against you if you put a multitude of email addresses from one real estate office in the same distribution list. That is another reason why I have 26 folders for 6,500 realtors… 250 email addresses to each folder. By having this many folders I can easily spread an office of 26 realtors into one realtor per file.

Imagine how easy it is for me to generate leads! Imagine how many people recognize my name after a few months! Imagine how many people think of me during the day as deals come across their desks! I simply go to my site, select another 250 realtors, copy and paste the same message into the email and hit send. I can send that same message to a different 250 realtors a day for almost a month before I have to change the message. It takes about 30 seconds a day to send out that message. I do it first thing in the morning before I start my daily adventures. Sometime during the day or in the evening I check my email in box for favorable responses. If I have a lot of responses I will not send out another email message until I have contacted every responder and opted in or out of their proposal or offer.

In this particular case it wasn’t until about 45 days later that I got the email I had been REALLY looking for. I received an email from an investor named David whom I’d met at the local real estate investment club (San Antonio Real Estate Investment Association – SAREIA) many, many months ago. I can’t tell you how many emails addresses I harvest from my local RE club… but I’d guess it is in the 100s.

David wanted to know if I was still looking for lots. He went on to explain that he had received my email several weeks ago and that he had saved it just incase he ran across what I was looking for. As luck would have it… he had bumped into a family trying to settle an estate. They needed to sell 16 small lots on the Southside of San Antonio to close out the estate.

I responded with a phone call to David and he explained the situation. The estate had 16 lots they needed to sell as soon as possible. Selling the lots was the last step in closing out an arduous estate. He asked me how much I could pay per lot and still come out good on the Deal. I told him that I could pay up to $12,000 a lot, but for it to be a GOOD deal for me I’d need it to be around $8,000. David was a smart a shrewd investor. He knew that if he gave me a GOOD DEAL I would be more likely to strike and strike fast. He also knew he could get the lots at a good price. David asked me if I would be upset if he negotiated a deal to purchase the lots for $4,000 and then sold them to me for the $8,000 I told him, as I had stated before, That $8,000 would be a very good deal for me. After all, he offered me the optimum of what I had asked for. I never begrudge the amount of money anyone else makes on the deal if I am happy with my position. I agreed to buy the lots at $8,000 if he could get a contract for less… no matter how much less.

Later that week David had consummated a deal with the estate at exactly what he had set his sites on… $4,000 per lot. I contracted to buy the lots for $8,000 if everything was fine legally and if I could get a title commitment on each lot. Let’s do the math;

David would contract the 16 Lots at $4,000 each… total strike price of $64,000 I would agree to buy the 16 lots at $8,000 each… a total price of $128,000

David had set himself up to make a cool $64,000 in one transaction covering 16 lots and I would have 16 lots at a killer price to build affordable homes on. Did it bother me that David was going to make so much so fast?…not in the least. I would make my money too, eventually.

As I stated before, I had already had some success building 2 houses from the exact same set of plans on 2 separate lots. I intended to build that exact same house yet again on every lot David was offering to sell me. Obviously, my building costs would be very predictable. My contractors had already absorbed the learning curve and therefore would be able to build the new homes in a “cookie cutter” fashion. My previous experience told me that the homes would be sold before the paint was even dry and that I could expect about a $20,000 minimum profit per home. Let’s do that math;

16 homes x $20,000 profit each = $320,000

Needless to say… I was very happy with the deal. I figured I could complete the building and the sales of the homes in about 12 months. I was also ecstatic about the location of the lots. They were in exactly the type of lower income area I was looking for and they were close to a very popular, main thorough fair. I signed the commitment letter for David immediately and awaited closing instructions.

Things took a turn for the worse when I discovered that the lots were smaller than the size I had requested in my first email to my investor list. I had asked that the lots be at least 50 ft. wide and a minimum of 4,000 sq. ft. in size. These lots measured only 25’ x 100’ and that was way short of what I needed. I could not build a decent home on a lot that was only 25’ wide. Furthermore, the city code wouldn’t allow me to build a house on lots that small.

I called David and explained to him that no one could build on a lot that was 25’ x 100‘ and that it would take 2 lots to build 1 house. He acknowledged my previous email… and that I had, in fact, requested lots that were at least 50’ x 100’ to build on.

As luck would have it, many of the lots were contiguous. There was a clump of lots on the main street and a clump of lots across the block and yet another clump just down the street from there. The lots could be easily paired up to create 8 lots measuring 50’ x 100’ lots and thus we made a plan “B.” David would go back to the estate and re-negotiate the deal, explaining to the executrix of the estate that their sales price would have to be cut in half because the lots were too small to build on individually.

My hat’s off to David. The big problem with all of this negotiating and then re-negotiating was that the estate consisted of 13 heirs. 13 heirs had to agree! I have dealt with my fair share of estates and believe me when I tell you; it is hard enough to get 2 heirs to agree on a sale… much less 13 heirs. Still, David persisted and several weeks later I had a revised contract in my hand and we were off to the races yet again. Now, the math looked like this;

David had contracted to buy the 16 lots for $2,000 each (down from $4,000 each). It would take 2 lots to equal 1 building site so the 8 building sites would cost me $4,000 each. I had lost 50% of my potential sites but I was still at the price per building site I was excited about.

David had re-contracted with the estate to buy 16 lots for $2,000 each… $32,000 for 8 building sites.

In essence, I contracted with David to buy the 8 building sites for $8,000 each… $64,000

I was down to 8 lots I could build on instead of 16, but I was still happy with the prospect of building 8 homes at a profit of $20,000 each… 8 homes x $20,000 profit each = $160,000 profit

Everything seemed to move quickly after that. Soon it was time to close and I was off to the title company to sign docs. It was turning out to be a routine closing when suddenly the closing agent asked me to sign a disclaimer acknowledging that the lots were situated over the “Kelly Plume.”

Now, exactly what is “The Kelly Plume?” Well, as it turns out, the “Kelly Plume” is a region of land that has been affected by chemicals used by the Kelly Air Force Base to clean and rebuild jet engines. A toxic chemical used by the air force beginning in the 1950s (a practice that ended years ago) had been steadily soaking into the ground and had affected a water table some 80 feet below the surface. Over the years it had spread. It had permeated out under numerous neighborhoods throughout the Southside. Apparently it was gaining some media attention at the time. They wanted me to sign off on a disclaimer and, more specifically, newspaper articles that proclaimed this as an EPA hazard. Needless to say, I was heartbroken. I stopped signing papers and the deal was left dead on the table. I sited “Undo Duress” as my reason for not closing because there had been no mention of this in the events leading up to the closing. Nobody argued my reasoning.

I called David to tell him of the unfortunate events. As you can imagine, he was heartbroken as well. After all, he was a day away from receiving a nice paycheck for his entrepreneurial efforts… now all was lost. None the less, David was a consummate Pro. He took the change of events in stride and agreed that I had done the logical thing by NOT closing the deal. I was relieved that David understood because the last thing I want to do is sign up for a deal and not close. I’ll say it again, David was a consummate pro.

It took me a day or two to get over the loss. Never letting a deal die easily I began to rationalize the prospect of going ahead with the deal;

1. I could build the homes at a cost of $60,000 total investment (Land Included) and sell them with a disclaimer acknowledging the Plume. It was a reasonable thought because I could actually reason with potential Buyers that the city did NOT use that water. Every Restaurant, YMCA, School, Hospital and Household in the region used water piped from a completely different source. In fact, the only way that specific water would be a problem is if someone actually drilled a well that tapped the contaminated water. People are not going to drill a “private” well in an inner city which offers clean water at the spigot. The deal was still over stressed. I would have too much money invested to take that kind of risk.

2. I could buy the lots and sell the lots ONLY. If I didn’t have to build a house on the lots I would only be into each building site for $8,000. I could possibly sell the lots for $15,000 each, but still, it didn’t meet my “Risk Reward” comfort level

I did my best to consider all options, but as far as I was concerned, the deal died at the closing. There was nothing left to do about it. Having to sell with a “DISCLAIMER” was too much. The financial liability was too great.

I can’t tell you how many days past after that, maybe a month or two or three, but one day I got yet another call from David. He told me that t

I used the same message but modified it for Realtors. Compared to the INVESTOR COMMUNITY the realtors are a bit touchy… Sooooo, when it comes to the realtors, I methodically send out 250 realtor emails a day instead of hitting the entire group at one time. Let’s do the math;

I have about 6,500 realtor email addresses, I send out 250 a day, I don’t have to create a new message for 26 days. Actually it’s even longer than that because I don’t send out emails on the weekends or on Holidays. Why don’t I blast all of the realtors at once? I actually spread it out for several reasons:

1. I don’t want to create more leads than I can respectfully handle. Nothing will hurt your business faster than asking for help and then NOT responding when help calls you. Even if the deal is a complete loser you need to respectfully decline. Imagine a person holding out their hand to shake hands with you and then you decline to extend your own hand… that is what it is like if you don’t respond to an email that has responded to your request.

2. I don’t want to beat my list of realtors up everyday because they’ll soon request to be “REMOVED” from my LIST. Nobody likes to get hit with an endless barrage of mails day after day. YOU don’t like it and THEY don’t like it…NOBODY likes it!

3. I want to stay in front of my network every 2 to 3 weeks with a viable message. By presenting myself every 2 or 3 weeks I have a better chance of staying in the forefront of their minds. TOP of MIND AWARNESS is what I want to accomplish. When someone in my network runs across a deal, I want them to think of me.

4. Some realtors in the community tend to frown on an investor if they think they are available to every other agent out there. I don’t know why that is but it is true. When confronted with agents that want me to sign up with them “exclusively” I always ask them, “Dear Mr. Agent, could they live with only ONE client? If they don’t understand where I’m coming from after that question… I move on without them.

HINT: It works against you if you put a multitude of email addresses from one real estate office in the same distribution list. That is another reason why I have 26 folders for 6,500 realtors… 250 email addresses to each folder. By having this many folders I can easily spread an office of 26 realtors into one realtor per file.

Imagine how easy it is for me to generate leads! Imagine how many people recognize my name after a few months! Imagine how many people think of me during the day as deals come across their desks! I simply go to my site, select another 250 realtors, copy and paste the same message into the email and hit send. I can send that same message to a different 250 realtors a day for almost a month before I have to change the message. It takes about 30 seconds a day to send out that message. I do it first thing in the morning before I start my daily adventures. Sometime during the day or in the evening I check my email in box for favorable responses. If I have a lot of responses I will not send out another email message until I have contacted every responder and opted in or out of their proposal or offer.

In this particular case it wasn’t until about 45 days later that I got the email I had been REALLY looking for. I received an email from an investor named David whom I’d met at the local real estate investment club (San Antonio Real Estate Investment Association – SAREIA) many, many months ago. I can’t tell you how many emails addresses I harvest from my local RE club… but I’d guess it is in the 100s.

David wanted to know if I was still looking for lots. He went on to explain that he had received my email several weeks ago and that he had saved it just incase he ran across what I was looking for. As luck would have it… he had bumped into a family trying to settle an estate. They needed to sell 16 small lots on the Southside of San Antonio to close out the estate.

I responded with a phone call to David and he explained the situation. The estate had 16 lots they needed to sell as soon as possible. Selling the lots was the last step in closing out an arduous estate. He asked me how much I could pay per lot and still come out good on the Deal. I told him that I could pay up to $12,000 a lot, but for it to be a GOOD deal for me I’d need it to be around $8,000. David was a smart a shrewd investor. He knew that if he gave me a GOOD DEAL I would be more likely to strike and strike fast. He also knew he could get the lots at a good price. David asked me if I would be upset if he negotiated a deal to purchase the lots for $4,000 and then sold them to me for the $8,000 I told him, as I had stated before, That $8,000 would be a very good deal for me. After all, he offered me the optimum of what I had asked for. I never begrudge the amount of money anyone else makes on the deal if I am happy with my position. I agreed to buy the lots at $8,000 if he could get a contract for less… no matter how much less.

Later that week David had consummated a deal with the estate at exactly what he had set his sites on… $4,000 per lot. I contracted to buy the lots for $8,000 if everything was fine legally and if I could get a title commitment on each lot. Let’s do the math;

David would contract the 16 Lots at $4,000 each… total strike price of $64,000 I would agree to buy the 16 lots at $8,000 each… a total price of $128,000

David had set himself up to make a cool $64,000 in one transaction covering 16 lots and I would have 16 lots at a killer price to build affordable homes on. Did it bother me that David was going to make so much so fast?…not in the least. I would make my money too, eventually.

As I stated before, I had already had some success building 2 houses from the exact same set of plans on 2 separate lots. I intended to build that exact same house yet again on every lot David was offering to sell me. Obviously, my building costs would be very predictable. My contractors had already absorbed the learning curve and therefore would be able to build the new homes in a “cookie cutter” fashion. My previous experience told me that the homes would be sold before the paint was even dry and that I could expect about a $20,000 minimum profit per home. Let’s do that math;

16 homes x $20,000 profit each = $320,000

Needless to say… I was very happy with the deal. I figured I could complete the building and the sales of the homes in about 12 months. I was also ecstatic about the location of the lots. They were in exactly the type of lower income area I was looking for and they were close to a very popular, main thorough fair. I signed the commitment letter for David immediately and awaited closing instructions.

Things took a turn for the worse when I discovered that the lots were smaller than the size I had requested in my first email to my investor list. I had asked that the lots be at least 50 ft. wide and a minimum of 4,000 sq. ft. in size. These lots measured only 25’ x 100’ and that was way short of what I needed. I could not build a decent home on a lot that was only 25’ wide. Furthermore, the city code wouldn’t allow me to build a house on lots that small.

I called David and explained to him that no one could build on a lot that was 25’ x 100‘ and that it would take 2 lots to build 1 house. He acknowledged my previous email… and that I had, in fact, requested lots that were at least 50’ x 100’ to build on.

As luck would have it, many of the lots were contiguous. There was a clump of lots on the main street and a clump of lots across the block and yet another clump just down the street from there. The lots could be easily paired up to create 8 lots measuring 50’ x 100’ lots and thus we made a plan “B.” David would go back to the estate and re-negotiate the deal, explaining to the executrix of the estate that their sales price would have to be cut in half because the lots were too small to build on individually.

My hat’s off to David. The big problem with all of this negotiating and then re-negotiating was that the estate consisted of 13 heirs. 13 heirs had to agree! I have dealt with my fair share of estates and believe me when I tell you; it is hard enough to get 2 heirs to agree on a sale… much less 13 heirs. Still, David persisted and several weeks later I had a revised contract in my hand and we were off to the races yet again. Now, the math looked like this;

David had contracted to buy the 16 lots for $2,000 each (down from $4,000 each). It would take 2 lots to equal 1 building site so the 8 building sites would cost me $4,000 each. I had lost 50% of my potential sites but I was still at the price per building site I was excited about.

David had re-contracted with the estate to buy 16 lots for $2,000 each… $32,000 for 8 building sites.

In essence, I contracted with David to buy the 8 building sites for $8,000 each… $64,000

I was down to 8 lots I could build on instead of 16, but I was still happy with the prospect of building 8 homes at a profit of $20,000 each… 8 homes x $20,000 profit each = $160,000 profit

Everything seemed to move quickly after that. Soon it was time to close and I was off to the title company to sign docs. It was turning out to be a routine closing when suddenly the closing agent asked me to sign a disclaimer acknowledging that the lots were situated over the “Kelly Plume.”

Now, exactly what is “The Kelly Plume?” Well, as it turns out, the “Kelly Plume” is a region of land that has been affected by chemicals used by the Kelly Air Force Base to clean and rebuild jet engines. A toxic chemical used by the air force beginning in the 1950s (a practice that ended years ago) had been steadily soaking into the ground and had affected a water table some 80 feet below the surface. Over the years it had spread. It had permeated out under numerous neighborhoods throughout the Southside. Apparently it was gaining some media attention at the time. They wanted me to sign off on a disclaimer and, more specifically, newspaper articles that proclaimed this as an EPA hazard. Needless to say, I was heartbroken. I stopped signing papers and the deal was left dead on the table. I sited “Undo Duress” as my reason for not closing because there had been no mention of this in the events leading up to the closing. Nobody argued my reasoning.

I called David to tell him of the unfortunate events. As you can imagine, he was heartbroken as well. After all, he was a day away from receiving a nice paycheck for his entrepreneurial efforts… now all was lost. None the less, David was a consummate Pro. He took the change of events in stride and agreed that I had done the logical thing by NOT closing the deal. I was relieved that David understood because the last thing I want to do is sign up for a deal and not close. I’ll say it again, David was a consummate pro.

It took me a day or two to get over the loss. Never letting a deal die easily I began to rationalize the prospect of going ahead with the deal;

1. I could build the homes at a cost of $60,000 total investment (Land Included) and sell them with a disclaimer acknowledging the Plume. It was a reasonable thought because I could actually reason with potential Buyers that the city did NOT use that water. Every Restaurant, YMCA, School, Hospital and Household in the region used water piped from a completely different source. In fact, the only way that specific water would be a problem is if someone actually drilled a well that tapped the contaminated water. People are not going to drill a “private” well in an inner city which offers clean water at the spigot. The deal was still over stressed. I would have too much money invested to take that kind of risk.

2. I could buy the lots and sell the lots ONLY. If I didn’t have to build a house on the lots I would only be into each building site for $8,000. I could possibly sell the lots for $15,000 each, but still, it didn’t meet my “Risk Reward” comfort level

I did my best to consider all options, but as far as I was concerned, the deal died at the closing. There was nothing left to do about it. Having to sell with a “DISCLAIMER” was too much. The financial liability was too great.

I can’t tell you how many days past after that, maybe a month or two or three, but one day I got yet another call from David. He told me that t

In this particular case it wasn’t until about 45 days later that I got the email I had been REALLY looking for. I received an email from an investor named David whom I’d met at the local real estate investment club (San Antonio Real Estate Investment Association – SAREIA) many, many months ago. I can’t tell you how many emails addresses I harvest from my local RE club… but I’d guess it is in the 100s.

David wanted to know if I was still looking for lots. He went on to explain that he had received my email several weeks ago and that he had saved it just incase he ran across what I was looking for. As luck would have it… he had bumped into a family trying to settle an estate. They needed to sell 16 small lots on the Southside of San Antonio to close out the estate.

I responded with a phone call to David and he explained the situation. The estate had 16 lots they needed to sell as soon as possible. Selling the lots was the last step in closing out an arduous estate. He asked me how much I could pay per lot and still come out good on the Deal. I told him that I could pay up to $12,000 a lot, but for it to be a GOOD deal for me I’d need it to be around $8,000. David was a smart a shrewd investor. He knew that if he gave me a GOOD DEAL I would be more likely to strike and strike fast. He also knew he could get the lots at a good price. David asked me if I would be upset if he negotiated a deal to purchase the lots for $4,000 and then sold them to me for the $8,000 I told him, as I had stated before, That $8,000 would be a very good deal for me. After all, he offered me the optimum of what I had asked for. I never begrudge the amount of money anyone else makes on the deal if I am happy with my position. I agreed to buy the lots at $8,000 if he could get a contract for less… no matter how much less.

Later that week David had consummated a deal with the estate at exactly what he had set his sites on… $4,000 per lot. I contracted to buy the lots for $8,000 if everything was fine legally and if I could get a title commitment on each lot. Let’s do the math;

David would contract the 16 Lots at $4,000 each… total strike price of $64,000 I would agree to buy the 16 lots at $8,000 each… a total price of $128,000

David had set himself up to make a cool $64,000 in one transaction covering 16 lots and I would have 16 lots at a killer price to build affordable homes on. Did it bother me that David was going to make so much so fast?…not in the least. I would make my money too, eventually.

As I stated before, I had already had some success building 2 houses from the exact same set of plans on 2 separate lots. I intended to build that exact same house yet again on every lot David was offering to sell me. Obviously, my building costs would be very predictable. My contractors had already absorbed the learning curve and therefore would be able to build the new homes in a “cookie cutter” fashion. My previous experience told me that the homes would be sold before the paint was even dry and that I could expect about a $20,000 minimum profit per home. Let’s do that math;

16 homes x $20,000 profit each = $320,000

Needless to say… I was very happy with the deal. I figured I could complete the building and the sales of the homes in about 12 months. I was also ecstatic about the location of the lots. They were in exactly the type of lower income area I was looking for and they were close to a very popular, main thorough fair. I signed the commitment letter for David immediately and awaited closing instructions.

Things took a turn for the worse when I discovered that the lots were smaller than the size I had requested in my first email to my investor list. I had asked that the lots be at least 50 ft. wide and a minimum of 4,000 sq. ft. in size. These lots measured only 25’ x 100’ and that was way short of what I needed. I could not build a decent home on a lot that was only 25’ wide. Furthermore, the city code wouldn’t allow me to build a house on lots that small.

I called David and explained to him that no one could build on a lot that was 25’ x 100‘ and that it would take 2 lots to build 1 house. He acknowledged my previous email… and that I had, in fact, requested lots that were at least 50’ x 100’ to build on.

As luck would have it, many of the lots were contiguous. There was a clump of lots on the main street and a clump of lots across the block and yet another clump just down the street from there. The lots could be easily paired up to create 8 lots measuring 50’ x 100’ lots and thus we made a plan “B.” David would go back to the estate and re-negotiate the deal, explaining to the executrix of the estate that their sales price would have to be cut in half because the lots were too small to build on individually.

My hat’s off to David. The big problem with all of this negotiating and then re-negotiating was that the estate consisted of 13 heirs. 13 heirs had to agree! I have dealt with my fair share of estates and believe me when I tell you; it is hard enough to get 2 heirs to agree on a sale… much less 13 heirs. Still, David persisted and several weeks later I had a revised contract in my hand and we were off to the races yet again. Now, the math looked like this;

David had contracted to buy the 16 lots for $2,000 each (down from $4,000 each). It would take 2 lots to equal 1 building site so the 8 building sites would cost me $4,000 each. I had lost 50% of my potential sites but I was still at the price per building site I was excited about.

David had re-contracted with the estate to buy 16 lots for $2,000 each… $32,000 for 8 building sites.

In essence, I contracted with David to buy the 8 building sites for $8,000 each… $64,000

I was down to 8 lots I could build on instead of 16, but I was still happy with the prospect of building 8 homes at a profit of $20,000 each… 8 homes x $20,000 profit each = $160,000 profit

Everything seemed to move quickly after that. Soon it was time to close and I was off to the title company to sign docs. It was turning out to be a routine closing when suddenly the closing agent asked me to sign a disclaimer acknowledging that the lots were situated over the “Kelly Plume.”

Now, exactly what is “The Kelly Plume?” Well, as it turns out, the “Kelly Plume” is a region of land that has been affected by chemicals used by the Kelly Air Force Base to clean and rebuild jet engines. A toxic chemical used by the air force beginning in the 1950s (a practice that ended years ago) had been steadily soaking into the ground and had affected a water table some 80 feet below the surface. Over the years it had spread. It had permeated out under numerous neighborhoods throughout the Southside. Apparently it was gaining some media attention at the time. They wanted me to sign off on a disclaimer and, more specifically, newspaper articles that proclaimed this as an EPA hazard. Needless to say, I was heartbroken. I stopped signing papers and the deal was left dead on the table. I sited “Undo Duress” as my reason for not closing because there had been no mention of this in the events leading up to the closing. Nobody argued my reasoning.

I called David to tell him of the unfortunate events. As you can imagine, he was heartbroken as well. After all, he was a day away from receiving a nice paycheck for his entrepreneurial efforts… now all was lost. None the less, David was a consummate Pro. He took the change of events in stride and agreed that I had done the logical thing by NOT closing the deal. I was relieved that David understood because the last thing I want to do is sign up for a deal and not close. I’ll say it again, David was a consummate pro.

It took me a day or two to get over the loss. Never letting a deal die easily I began to rationalize the prospect of going ahead with the deal;

1. I could build the homes at a cost of $60,000 total investment (Land Included) and sell them with a disclaimer acknowledging the Plume. It was a reasonable thought because I could actually reason with potential Buyers that the city did NOT use that water. Every Restaurant, YMCA, School, Hospital and Household in the region used water piped from a completely different source. In fact, the only way that specific water would be a problem is if someone actually drilled a well that tapped the contaminated water. People are not going to drill a “private” well in an inner city which offers clean water at the spigot. The deal was still over stressed. I would have too much money invested to take that kind of risk.

2. I could buy the lots and sell the lots ONLY. If I didn’t have to build a house on the lots I would only be into each building site for $8,000. I could possibly sell the lots for $15,000 each, but still, it didn’t meet my “Risk Reward” comfort level

I did my best to consider all options, but as far as I was concerned, the deal died at the closing. There was nothing left to do about it. Having to sell with a “DISCLAIMER” was too much. The financial liability was too great.

I can’t tell you how many days past after that, maybe a month or two or three, but one day I got yet another call from David. He told me that t

16 homes x $20,000 profit each = $320,000

Needless to say… I was very happy with the deal. I figured I could complete the building and the sales of the homes in about 12 months. I was also ecstatic about the location of the lots. They were in exactly the type of lower income area I was looking for and they were close to a very popular, main thorough fair. I signed the commitment letter for David immediately and awaited closing instructions.

Things took a turn for the worse when I discovered that the lots were smaller than the size I had requested in my first email to my investor list. I had asked that the lots be at least 50 ft. wide and a minimum of 4,000 sq. ft. in size. These lots measured only 25’ x 100’ and that was way short of what I needed. I could not build a decent home on a lot that was only 25’ wide. Furthermore, the city code wouldn’t allow me to build a house on lots that small.

I called David and explained to him that no one could build on a lot that was 25’ x 100‘ and that it would take 2 lots to build 1 house. He acknowledged my previous email… and that I had, in fact, requested lots that were at least 50’ x 100’ to build on.

As luck would have it, many of the lots were contiguous. There was a clump of lots on the main street and a clump of lots across the block and yet another clump just down the street from there. The lots could be easily paired up to create 8 lots measuring 50’ x 100’ lots and thus we made a plan “B.” David would go back to the estate and re-negotiate the deal, explaining to the executrix of the estate that their sales price would have to be cut in half because the lots were too small to build on individually.

My hat’s off to David. The big problem with all of this negotiating and then re-negotiating was that the estate consisted of 13 heirs. 13 heirs had to agree! I have dealt with my fair share of estates and believe me when I tell you; it is hard enough to get 2 heirs to agree on a sale… much less 13 heirs. Still, David persisted and several weeks later I had a revised contract in my hand and we were off to the races yet again. Now, the math looked like this;

David had contracted to buy the 16 lots for $2,000 each (down from $4,000 each). It would take 2 lots to equal 1 building site so the 8 building sites would cost me $4,000 each. I had lost 50% of my potential sites but I was still at the price per building site I was excited about.

David had re-contracted with the estate to buy 16 lots for $2,000 each… $32,000 for 8 building sites.

In essence, I contracted with David to buy the 8 building sites for $8,000 each… $64,000

I was down to 8 lots I could build on instead of 16, but I was still happy with the prospect of building 8 homes at a profit of $20,000 each… 8 homes x $20,000 profit each = $160,000 profit

Everything seemed to move quickly after that. Soon it was time to close and I was off to the title company to sign docs. It was turning out to be a routine closing when suddenly the closing agent asked me to sign a disclaimer acknowledging that the lots were situated over the “Kelly Plume.”

Now, exactly what is “The Kelly Plume?” Well, as it turns out, the “Kelly Plume” is a region of land that has been affected by chemicals used by the Kelly Air Force Base to clean and rebuild jet engines. A toxic chemical used by the air force beginning in the 1950s (a practice that ended years ago) had been steadily soaking into the ground and had affected a water table some 80 feet below the surface. Over the years it had spread. It had permeated out under numerous neighborhoods throughout the Southside. Apparently it was gaining some media attention at the time. They wanted me to sign off on a disclaimer and, more specifically, newspaper articles that proclaimed this as an EPA hazard. Needless to say, I was heartbroken. I stopped signing papers and the deal was left dead on the table. I sited “Undo Duress” as my reason for not closing because there had been no mention of this in the events leading up to the closing. Nobody argued my reasoning.

I called David to tell him of the unfortunate events. As you can imagine, he was heartbroken as well. After all, he was a day away from receiving a nice paycheck for his entrepreneurial efforts… now all was lost. None the less, David was a consummate Pro. He took the change of events in stride and agreed that I had done the logical thing by NOT closing the deal. I was relieved that David understood because the last thing I want to do is sign up for a deal and not close. I’ll say it again, David was a consummate pro.

It took me a day or two to get over the loss. Never letting a deal die easily I began to rationalize the prospect of going ahead with the deal;

1. I could build the homes at a cost of $60,000 total investment (Land Included) and sell them with a disclaimer acknowledging the Plume. It was a reasonable thought because I could actually reason with potential Buyers that the city did NOT use that water. Every Restaurant, YMCA, School, Hospital and Household in the region used water piped from a completely different source. In fact, the only way that specific water would be a problem is if someone actually drilled a well that tapped the contaminated water. People are not going to drill a “private” well in an inner city which offers clean water at the spigot. The deal was still over stressed. I would have too much money invested to take that kind of risk.

2. I could buy the lots and sell the lots ONLY. If I didn’t have to build a house on the lots I would only be into each building site for $8,000. I could possibly sell the lots for $15,000 each, but still, it didn’t meet my “Risk Reward” comfort level

I did my best to consider all options, but as far as I was concerned, the deal died at the closing. There was nothing left to do about it. Having to sell with a “DISCLAIMER” was too much. The financial liability was too great.

I can’t tell you how many days past after that, maybe a month or two or three, but one day I got yet another call from David. He told me that t

Now, exactly what is “The Kelly Plume?” Well, as it turns out, the “Kelly Plume” is a region of land that has been affected by chemicals used by the Kelly Air Force Base to clean and rebuild jet engines. A toxic chemical used by the air force beginning in the 1950s (a practice that ended years ago) had been steadily soaking into the ground and had affected a water table some 80 feet below the surface. Over the years it had spread. It had permeated out under numerous neighborhoods throughout the Southside. Apparently it was gaining some media attention at the time. They wanted me to sign off on a disclaimer and, more specifically, newspaper articles that proclaimed this as an EPA hazard. Needless to say, I was heartbroken. I stopped signing papers and the deal was left dead on the table. I sited “Undo Duress” as my reason for not closing because there had been no mention of this in the events leading up to the closing. Nobody argued my reasoning.

I called David to tell him of the unfortunate events. As you can imagine, he was heartbroken as well. After all, he was a day away from receiving a nice paycheck for his entrepreneurial efforts… now all was lost. None the less, David was a consummate Pro. He took the change of events in stride and agreed that I had done the logical thing by NOT closing the deal. I was relieved that David understood because the last thing I want to do is sign up for a deal and not close. I’ll say it again, David was a consummate pro.

It took me a day or two to get over the loss. Never letting a deal die easily I began to rationalize the prospect of going ahead with the deal;

1. I could build the homes at a cost of $60,000 total investment (Land Included) and sell them with a disclaimer acknowledging the Plume. It was a reasonable thought because I could actually reason with potential Buyers that the city did NOT use that water. Every Restaurant, YMCA, School, Hospital and Household in the region used water piped from a completely different source. In fact, the only way that specific water would be a problem is if someone actually drilled a well that tapped the contaminated water. People are not going to drill a “private” well in an inner city which offers clean water at the spigot. The deal was still over stressed. I would have too much money invested to take that kind of risk.

2. I could buy the lots and sell the lots ONLY. If I didn’t have to build a house on the lots I would only be into each building site for $8,000. I could possibly sell the lots for $15,000 each, but still, it didn’t meet my “Risk Reward” comfort level

I did my best to consider all options, but as far as I was concerned, the deal died at the closing. There was nothing left to do about it. Having to sell with a “DISCLAIMER” was too much. The financial liability was too great.

I can’t tell you how many days past after that, maybe a month or two or three, but one day I got yet another call from David. He told me that the Estate was desperate to sell the lots and bring an end to their dilemma. They wanted me to make an offer. I told David that I did not want to be insensitive but if I had to make an offer I would offer $500 per building site ($4,000 Total). Plus, we agreed I would pay David an additional $4,000 for his efforts. My total investment for the 8 building sites would be $8,000. My thoughts were;

1. People living in that area knew that the plume was not affecting their lives.

2. I could definitely sell the building sites for something over $1,000 per building site…even if I had to give a disclaimer. My immediate calculations said I could possibly sell the sites for as much as $15,000 to someone who understood #1 above… even with the disclaimer.

3. If I could not sell the lots TODAY I could sell them in the future. Clean up plans were being worked on, be it 1 year or 10 years from now, the $8,000 I had invested would pay me back before it was all said and done.

4. If I lost $8,000 it would not be the end of my world.

With that mindset I consummated a deal with David. David managed to strike the deal with the Estate and we closed shortly there after. In the proceeding months I sold all of the 8 building sites with FULL DISCLOSURES for roughly $15,000 each. Once again, let’s do the math;

I had $8,000 invested in 8 building sites ($4,000 to the Estate and $4,000 to David). Because I was offering such a low price I had to incur all of the closing costs which totaled an additional $4,000. Including the closing costs I had $12,000 invested in 8 building sites. I sold the 8 sites for $15,000 each…. 8 x $15,000 = $120,000… less my $12,000 investment… Total profit = $108,000. Of course I had some advertising and some sign expenses and some gas and some time involved as well… but let’s not trip over the pennies on the way to the dollars. It was a very good deal.

If there is a “moral” to the story it is this:

NEVER let a deal die on your side of the table… because David exercised that theory, I was able to exercise the theory as well.

SIDE NOTE: I never knew that the building sites would actually sell for what they eventually sold for. I had a hunch that they could be worth as much as $15,000 per site but given the fact that I had to sell with such an ominous disclaimer I was not for certain what would happen. I placed my advertisements at the top of my expectations knowing that I could reduce my price if the market was staunch. I did not make the deal I made because I was trying to make a terrific profit. I made the deal I made because I was afraid that I would get stuck with a loss. I did, however, give myself the CHANCE to make a terrific profit. This time my “calculated risk” worked out better than I had planned… by a long shot.

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