Hey, welcome to the habit, this podcast. I'm your host, Daniel Martinez. Today we have special guest, Chris Duffy is returning again, to cover deal breakdown, recover cool, interesting stories in real estate or business. Chris, what story do you have for us today? Yeah, I'll, I'll give you one about gas pipeline. You know, I'm sure that there's some other investors listening now that are, you know, kind of shuttering from, from bad experience. But, yeah, for this one, we were looking at this 10 acre tract north of Houston, you know, no surprise where some of these pipelines are based here. And it seemed like a really solid deal. Probably would sell for north of 180, at least close to 200,000. You know, kind of a family dispute what what we all, you know, oftentimes will it will find for motivated sellers say, one sibling really wants to get out of it, they're rallying the others up. And interestingly, this property we were looking at, was already on market. And, you know, oftentimes that that that's really the best comp there, because then you can actually see, hey, what's the pricing going for here? And so, so we know how to underwrite even more strategically, and the fact that they were reaching out from our direct marketing postcard was really indicating Hey, like, we can still get them. Fast cash transaction, not close to listing price. So I've called up the broker who was working with that family. And yeah, basically tried to work out a deal, hey, like we can offer, you know, south of 90,000, maybe like low 80, because there was because we also had to pay the broker's fee who was attached to that deal, anyway? Or actually, maybe not I'm this was a while ago, but there was some extra costs involved with that property that pushed it up closer to to 90,000. And we still thought we had at least a double there, if not more, and this was still like earlier, 2022 market was still hotter overall. Before, we know that that downturn started by, you know, q2, q3 of 2022. And things started getting a lot tougher. And so we worked out a deal with this broker, hey, we'll get this thing purchased. And then right afterwards, we would plan to list with you for that this higher price point, maybe even undercut a little bit from what you had listed for and be able to get close to a double sale. So we were able to, to work that out with with this broker, what went through the cash transaction. But the only thing that was of note there was that there was a gas pipeline easement. That right where the road frontage was if you wanted to put a driveway to build on you would have to cross that that easement. And it wasn't much I mean, we're talking less than 50 feet or so. And apparently, the broker had already been in touch with the the gas company, Kinder Morgan, you know, $20 billion market cap Corporation, it was going to be all squared away, we just have to sign a few papers, get our contractor out there. And you know that this is like less than, you know, three, four week process and can ya can just list from there no problem. A little did we know how crazy complex the red tape was going to be? Almost right from the get go? I'm sure again, many of you other land investors who have been in the business for a while, anytime you're dealing with some type of corporate entity, it's yeah, they rarely care about, you know, dealing with smaller operators, they're just kicking the can down the road, you know, some other managers, some other department, it's somebody else's problem. You know, that they're just collecting their checks like that this isn't really a concern for you know, some land operator trying to install, you know, a $10,000 gravel driveway over there. Pipelines here. So, you know, we had to get the 311 crew out there, we had to get Kinder Morgan to visit and, you know, get get all these new almost architectural designs for how the roads going to be how deep it's going to go. So trying what state that this was in Texas, just north of Houston. Oh, wow. Okay. Yeah. Um, and so we're trying to put all that together and again, that this pipeline is, you know, five feet below the surface. And all we're doing is installing a gravel driveway. It's nothing, nothing crazy here. And so you know, everything, you know, even though it was taking weeks at a time here, because yeah, they're just approval process was forever to get everybody scheduled. They finally said, okay, yeah, we're good to go pending you bringing us this insurance coverage on behalf of your contractor. And so they were asking for a $10 million policy that covers explosions, oil spills, all this crazy stuff. And yeah, like contractors like, yeah, I don't have any, like, I have like a million dollar policy. That's what's typical in the industry, he was calling his insurance provider, they wouldn't write a policy for that. So I'm trying to call around to find as exactly any type of insurance broker who's willing to write Yeah, something short term like for, you know, a couple of weeks that this was going to be, you know, two days really to install the driveway, can I get, you know, $10 million dollar coverage, covering explosions and so forth. Nobody was willing to touch that. If anything, this one broker saying, hey, I can try to find an underwriter in like London, who writes more exotic policies, but you know, it's probably going to be, you know, 37 $38,000, to get this thing done, which would have completely destroyed our potential margin on that deal, to take a risk. So I just kept trying to push back with Kinder Morgan, like, hey, like, we can't find anybody to cover this. You know, again, we're not going to be anywhere close to the pipeline, is there any way you guys can just let us do this? And so the the main underwriter for Kinder Morgan, again, this is why I don't work in corporations. I think a lot of us in, you know, the entrepreneurial and land space too, can can relate here is that the underwriter for Kinder Morgan, they were not supposed to have any external communications with possible clients, or people working with it, it was all internal. So, you know, it was a game of telephone where, you know, all of her fellow employees didn't know how to translate over the issue to her. And so finally, there was so much back and forth, email communication. And keep in mind that this was a six month plus timeline that that's happened at this point. And we made the mistake of listing the property prior to getting this done, because we thought, hey, let's get it on. And we're just mentioning, hey, we're gonna get a driveway installed. But meanwhile, we're just racking up the days on market. And and, you know, my broker was saying, Yeah, you know, brokers are, the buyside brokers are turning away their clients, because they don't want to, you know, give this big hassle to the rent buyers having to go over a gas easement. So we weren't able to get anybody. And meanwhile, like I mentioned, we bought spring 2022, the market started to turn. And so a lot of our margin was disappearing as well. Because you know, the $200,000 property, it was now turning into maybe one ad and then 170. And so the like, the longer we were waiting, we were just losing more and more money trying to get this done. So finally at Yeah, after so many emails, the insurance underwriter for Kinder Morgan finally calls me and then we're able to discuss have a real conversation here. I'm trying to explain how it can like we're not doing anything crazy, just gravel, driveway. Nobody, like we're not even going to be living there. We're just going to be selling the land, the house is going to be much further past the pipeline. So there's no like risk of people getting hurt, or whatever, even during the construction process. And within a 20 minute conversation, we were able to sort through, you know, the whole six months worth of, you know, this legal snarls and you're like, oh, yeah, let me just do a sign off here. You don't need the $10 million policy. You can get your contractor out like within the next week. Like you got to be kidding me here. We could have taken care of this. And yeah 30 minutes much prior. So now if we ever worked with Kinder Morgan again, we've actually seen some of those properties now I feel like I have an inside contact now you can Yeah, yeah. But nevertheless definitely, you know, have some scars and very conservative about looking at any properties with gas easements on them because

you might be able to get them for below market. But yeah, it can be a massive, massive hurdle to You try to figure out how to improve those properties at all. There you go. There you go. Where can people find you online? We got serious land capital. What's your Facebook group again? Yeah, so Facebook group is that land daily diligence Monday through Friday. I'm on for an hour at 2pm Central. Feel free to just either direct message me, email me, text me any deals that you're looking at. I will review them live for free. Whether you're looking for funding from us or not happy to help you with any of your underwriting questions and not lose money. You know, everybody here. Thanks for tuning in. Like, subscribe, share with a friend. We'll see you next episode. Thanks for coming, Chris. Everybody here. What's your deal episode. We'll see you next time. Thanks, guys. All right. Thanks, Dan. Yeah, bye