Distressed / Opportunistic Investing

Before developing a pre-foreclosure strategy, I bought approximately half a dozen properties through foreclosure auctions. I learned that buying quickly was not the same thing as being able to sell quickly. Redemption periods, title issues, and other complications could keep capital tied up long after the purchase.

I encountered repeated roadblocks trying to sell some of those early properties. I bought properties I could not readily sell, and I learned that my valuation and what the market would actually pay could be different. I was also sued in connection with my investing experience. Nothing teaches a lesson in grit like getting punched in the nose.

That does not mean every early investment went badly. But the difficult ones changed what I needed to understand before buying. An attractive purchase price was only part of the decision.

My first pre-foreclosure transaction involved two adjacent lots on Matagorda Bay in Sargent, Texas. I purchased them before the auction, closed through a local title company, and hired an agent to sell them. I remember roughly doubling my money in about a month. That was the outcome of this transaction, not a representative return for the practice.

The money was nice. The process was more important. Closing through title gave me much greater confidence in marketable title when I went to sell. The approaching foreclosure could be a signal, a deadline, and a reason for an owner to consider a transaction without being the auction where I had to acquire the property.

At the peak, approximately 2,000 foreclosure notices per month entered my research universe. I filtered that to approximately 40–60 properties that received some investigation, then narrowed it further to a much smaller group of serious pursuits. Most notices did not become deals.

The approaching auction generally gave me about two weeks to decide whether a situation was understandable and worth pursuing. Research, contact, negotiation, diligence, and a possible closing all had to fit within that window. The deadline made selectivity as important as speed.

The research could involve title and grantor/grantee history, liens, judgments, probate, ownership, heirship, valuation, and marketability. I was trying to understand both what I might be buying and what could prevent me from selling it. Some opportunities stopped being interesting as soon as that picture became clearer.

I became particularly interested in heirship situations and larger pieces of land with subdivision potential. They involved kinds of research and problem solving I was becoming better at. I was no longer trying to avoid every complicated property, but I still needed a reason to believe I could resolve the complications I would be taking on.

Before contacting someone, I wanted to understand the property, foreclosure, and ownership situation well enough to speak with confidence. That did not make my reconstruction automatically right. When someone contradicted what I believed, I took note, independently verified it, and updated my view. Sometimes that changed my offer. Sometimes it meant walking away.

An heir who would not sell could stop a transaction. So could title uncertainty I could not resolve to my satisfaction. In one instance, a conservation easement affected the property and ended my pursuit. Research did not always produce a solution; it also gave me reasons not to own the unresolved risk.

I started thinking less about the profit on an individual property and more about the velocity of the money moving through the practice. A purchase could look attractive and still leave me unable to move on to another opportunity.

Title problems, redemption periods, litigation risk, ownership questions, and an uncertain resale all affected that judgment. The early properties I could not readily sell made time and liquidity concrete. I began evaluating the path back out of an investment with more care, rather than treating the acquisition as the main event.

Around my sixth deal, I began investing with a partner. On deals we did together, he brought approximately half the capital and relationships with private lenders that allowed us to use leverage on acquisitions. I continued sourcing opportunities through the practice I had developed.

The partnership let me spread my own capital across more opportunities and move more quickly. His lending relationships were part of that capacity, alongside the capital itself. The work had become a shared investment effort, even as I continued developing the sourcing and research process.

Much of my early research lived on paper at my desk. I used pen and paper to construct the narrative of a deal and record what I learned from records and conversations. If I pursued it, those notes could become the basis for a durable digital archive. If I passed, I often threw them away.

When a foreclosure was postponed and the same property appeared months later, I might recognize it without remembering everything I had learned or why I had rejected it. Repeating the research cost time. Losing my earlier judgment meant I could not reliably return to what I had believed about the situation.

I wrote more about how that discarded research changed the way I think about systems and memory in The System Has to Remember.

By the end of this period, filtering opportunities, reconstructing incomplete situations, and testing what I believed had become recurring work. Deal Studio grew from an attempt to make more of that research and decision context persistent, searchable, and reusable, including the work behind opportunities I chose not to pursue.

Later, when I moved into commercial investment and development, almost everything about the environment changed. The data was different. The sellers were different. The timelines were longer, and collaboration became much more important.