Sometimes you have to push it to the limit to discover what you do. Challenge yourself! Pushing the limit is a good way to describe The Ranch deal. This story is about an 18,000 acre ranch, DEA agents, new marketing strategies, rattle snakes, small planes, cat litter, big profits, and a REALLY unique adventure.
I’ve done a lot of Option deals. Most were just ordinary deals. But a few were kind of crazy so I’m sharing some of my craziest Option deals to hopefully (1) inspire you to give Options a try, and (2) show you that anything is possible if you just set your mind to it.
Sometimes you have to push it to the limit to discover what you do. Challenge yourself!
With an Option, you can push the limits without taking on any risks… or at least minimize your risks with a properly constructed Option Contract. Your contingent contract spells out the terms and conditions under which you will actually close. But it also has provisions for if you do not close and the worst that can happen is you lose your option consideration. That’s why you want your option consideration to be as low as possible.
Pushing the limit is a good way to describe The Ranch deal.
CB Poynor called to see if I could help sell his 18,000 acre ranch in south Texas, near the Mexico border. This is outlaw country. If you don’t want to be found, this is a good place to go.
There was a 2400sf house, a bunk house with 10 rooms, an air strip and lots of rattle snakes in this area. He owes $365,000 and was behind on his payments. He had just received his notice of default. In Texas, the property is sold on the court house steps 21 days after the Notice of Default.
I did not have much time.
I got an Option contract with $10 consideration and no guarantees that I could do anything on such short notice. If I sold it, we agreed to split the profit 50/50 after all closing costs. I also got an authorization signed so I could contact his mortgage company to verify the pay off and see if we could get more time.
Comps were few and far between for a ranch this size in that area. The best I could figure it was worth about $1,200,000.
I sent out press releases about the property and started getting calls within a week. One guy wanted to build a resort. Ranchers were interested too though I don’t know why because it takes about an acre of land to raise a cow in this dry desert area.
Simultaneously to doing the marketing, I contacted a title company in the county where the property was so I could get a title search to determine if there were any other liens. The title company told me it would be 2 weeks before they could get the title search finished.
I didn’t have two weeks. So I flew from Dallas to the airport closest to the ranch then rented a car to drive 4 hours to the county seat to do my own title search. When I got there, it was noon. They were locking the doors and closing for lunch. So I went to the Dairy Queen, the only restaurant in town, to wait an hour until they opened again. The title search did not reveal any other liens.
While I was at the Records Office at the county court house, I noticed the county Extension office next door. These folks know about every square inch of property in the county. So I asked what they could tell me about CBs ranch. They said CB should be selling the Humate and Bentonite on the property.. that’s where the value is.
What’s that I asked?
Bentonite is what kitty cat little is made of. It has other uses too but that is the primary use. The ranch had an estimated 3 million tons of Bentonite
Humate is used to enrich soil and also used when drilling for oil. It is like a graphite. The ranch had an estimated 4 million tons of Humate.
The extension office said CB had a geological report about it. He never even told me about it. When I got back to Dallas, I met CB to pick up the detailed report about the minerals.
I instantly switched gears to selling the minerals instead of just the ranch.
An internet search revealed several companies who buy these minerals. I found a company in Chicago who buys both. They seemed to be the most interested. They are the leader in the industry and had been in business since the early 1920’s.
I sent a copy of the 120 page geological report to them Next Day delivery. They were very interested but wanted to send their geologist to the ranch to get their own samples and see the property.
We agreed to meet in El Paso Texas 2 days later. It is an 8 hour drive from El Paso to the ranch so I found a pilot who could fly us to the ranch instead. We could use the landing strip on the property.
The pilot showed up in his Jaguar to pick us up. He is a geologist too and has several silver mines in the area.
We drove to the hanger where his plane was. He pulled the 4 place Maul out of the hanger like it was toy. It seemed way too small to hold 4 adults (the pilot’s girlfriend was at the hanger). The pilot walked around the plane to put duct tape over little holes. He said he usually lands where there is no landing strip so rocks hit the plane and cause the holes which will RIP OPEN the plane if he does not cover them with duct tape.
Now, I’m getting nervous about getting in this tiny plane with duct tape holding it together!
What in the world did I get myself in to!
But I decided to suck it up and go for it. I just kept thinking about the profit potential.
We had to fly over a mountain range to get to the ranch. The plane would occasionally just drop when we hit an air pocket in the mountains. I had white knuckles and a knot in my stomach. The geologist from Chicago threw up.
About 15 minutes from the ranch, another plane came up next to us and called our pilot on the radio asking what we were doing. They did not seem to be satisfied with the answer. This was the DEA and I think they suspected us to be drug dealers. Oh great! They told us to stay in the plane when we landed because they would be landing right behind us and wanted to inspect the plane.
Of course, we got the all clear.
CB, the owner, met us at the ranch so we’d have his pick-up truck to get around and he could answer any of their questions about the ranch. He also brought drinks and sandwiches in a cooler.
The geologist pilot and the geologist from Chicago were like two kids in a candy store. They spent 6 hours filling little buckets with samples and talking about minerals, silver and gold.
I’ll spare the details about the rattle snakes in the lignite pits on the property and lots of other places.
After a very long and very HOT day, we all got back in the plane to fly to El Paso. With the cooler evening air, we did not have any sudden drops on the way back. We got in to El Paso just before sundown. After putting the plane in the hanger we all went to a great Mexican food place for dinner and margaritas. I really needed those margaritas after this experience.
A few days later the company in Chicago called to negotiate a deal. I signed a confidentiality agreement with them so I cannot disclose the details or sales price.
Needless to say, this “pushing it to the limit” experience was all worth it in the end.
Thankfully, most option deals are not like this. But it does show you that Options can be used to “control” just about anything until you find a buyer.
I’ve done a lot of Option deals. Most were just ordinary deals. But a few were kind of crazy so I’m sharing some of my craziest Option deals to hopefully (1) inspire you to give Options a try, and (2) show you that anything is possible if you just set your mind to it.
Sometimes you have to push it to the limit to discover what you do. Challenge yourself!
With an Option, you can push the limits without taking on any risks… or at least minimize your risks with a properly constructed Option Contract. Your contingent contract spells out the terms and conditions under which you will actually close. But it also has provisions for if you do not close and the worst that can happen is you lose your option consideration. That’s why you want your option consideration to be as low as possible.
Pushing the limit is a good way to describe The Ranch deal.
CB Poynor called to see if I could help sell his 18,000 acre ranch in south Texas, near the Mexico border. This is outlaw country. If you don’t want to be found, this is a good place to go.
There was a 2400sf house, a bunk house with 10 rooms, an air strip and lots of rattle snakes in this area. He owes $365,000 and was behind on his payments. He had just received his notice of default. In Texas, the property is sold on the court house steps 21 days after the Notice of Default.
I did not have much time.
I got an Option contract with $10 consideration and no guarantees that I could do anything on such short notice. If I sold it, we agreed to split the profit 50/50 after all closing costs. I also got an authorization signed so I could contact his mortgage company to verify the pay off and see if we could get more time.
Comps were few and far between for a ranch this size in that area. The best I could figure it was worth about $1,200,000.
I sent out press releases about the property and started getting calls within a week. One guy wanted to build a resort. Ranchers were interested too though I don’t know why because it takes about an acre of land to raise a cow in this dry desert area.
Simultaneously to doing the marketing, I contacted a title company in the county where the property was so I could get a title search to determine if there were any other liens. The title company told me it would be 2 weeks before they could get the title search finished.
I didn’t have two weeks. So I flew from Dallas to the airport closest to the ranch then rented a car to drive 4 hours to the county seat to do my own title search. When I got there, it was noon. They were locking the doors and closing for lunch. So I went to the Dairy Queen, the only restaurant in town, to wait an hour until they opened again. The title search did not reveal any other liens.
While I was at the Records Office at the county court house, I noticed the county Extension office next door. These folks know about every square inch of property in the county. So I asked what they could tell me about CBs ranch. They said CB should be selling the Humate and Bentonite on the property.. that’s where the value is.
What’s that I asked?
Bentonite is what kitty cat little is made of. It has other uses too but that is the primary use. The ranch had an estimated 3 million tons of Bentonite
Humate is used to enrich soil and also used when drilling for oil. It is like a graphite. The ranch had an estimated 4 million tons of Humate.
The extension office said CB had a geological report about it. He never even told me about it. When I got back to Dallas, I met CB to pick up the detailed report about the minerals.
I instantly switched gears to selling the minerals instead of just the ranch.
An internet search revealed several companies who buy these minerals. I found a company in Chicago who buys both. They seemed to be the most interested. They are the leader in the industry and had been in business since the early 1920’s.
I sent a copy of the 120 page geological report to them Next Day delivery. They were very interested but wanted to send their geologist to the ranch to get their own samples and see the property.
We agreed to meet in El Paso Texas 2 days later. It is an 8 hour drive from El Paso to the ranch so I found a pilot who could fly us to the ranch instead. We could use the landing strip on the property.
The pilot showed up in his Jaguar to pick us up. He is a geologist too and has several silver mines in the area.
We drove to the hanger where his plane was. He pulled the 4 place Maul out of the hanger like it was toy. It seemed way too small to hold 4 adults (the pilot’s girlfriend was at the hanger). The pilot walked around the plane to put duct tape over little holes. He said he usually lands where there is no landing strip so rocks hit the plane and cause the holes which will RIP OPEN the plane if he does not cover them with duct tape.
Now, I’m getting nervous about getting in this tiny plane with duct tape holding it together!
What in the world did I get myself in to!
But I decided to suck it up and go for it. I just kept thinking about the profit potential.
We had to fly over a mountain range to get to the ranch. The plane would occasionally just drop when we hit an air pocket in the mountains. I had white knuckles and a knot in my stomach. The geologist from Chicago threw up.
About 15 minutes from the ranch, another plane came up next to us and called our pilot on the radio asking what we were doing. They did not seem to be satisfied with the answer. This was the DEA and I think they suspected us to be drug dealers. Oh great! They told us to stay in the plane when we landed because they would be landing right behind us and wanted to inspect the plane.
Of course, we got the all clear.
CB, the owner, met us at the ranch so we’d have his pick-up truck to get around and he could answer any of their questions about the ranch. He also brought drinks and sandwiches in a cooler.
The geologist pilot and the geologist from Chicago were like two kids in a candy store. They spent 6 hours filling little buckets with samples and talking about minerals, silver and gold.
I’ll spare the details about the rattle snakes in the lignite pits on the property and lots of other places.
After a very long and very HOT day, we all got back in the plane to fly to El Paso. With the cooler evening air, we did not have any sudden drops on the way back. We got in to El Paso just before sundown. After putting the plane in the hanger we all went to a great Mexican food place for dinner and margaritas. I really needed those margaritas after this experience.
A few days later the company in Chicago called to negotiate a deal. I signed a confidentiality agreement with them so I cannot disclose the details or sales price.
Needless to say, this “pushing it to the limit” experience was all worth it in the end.
Thankfully, most option deals are not like this. But it does show you that Options can be used to “control” just about anything until you find a buyer.
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