After doing this for 20 years, I’ve seen my fair share of real estate challenges. But this one? This was like performing open-heart surgery on a deal that almost flatlined multiple times. Against all odds, my team and I managed to close it.
How It All Started: A Lead Turns Into a Golden Opportunity
This deal started like any other—a lead from our database. It turns out that this wasn’t just any lead. This was a previous client who had bought one property from us before. What makes this even funnier is that Joandry, a new agent looking for Spanish-speaking leads, landed this seller purely by filtering our database for last names that sounded Hispanic. And guess what? It worked.
As soon as we started analyzing the deal, we saw the potential. This wasn’t just any home—it came with two additional dwelling units (ADUs). It was a cash cow, bringing in $1,500 in net cash flow per month! This was one of those unicorn properties you don’t come across daily. Without hesitation, we presented it to one of our VIP buyers, and they jumped on it immediately. The numbers were just too good to ignore.
The Financing Nightmare Begins
Everything looked perfect—until we hit our first major obstacle. The lender didn’t like that the property had two ADUs—they only wanted to finance with one!
Apparently, after 20 years in the game, I never realized that having two ADUs could be such a deal-breaker for some lenders. We tried several lenders, and all of them said no. That’s when we had to get creative.
Creative Problem-Solving: The ‘Shed’ Strategy
Since lenders wouldn’t finance a property with two ADUs being rented, we decided to convert one unit into a “shed”—at least on paper. The idea was simple: if it wasn’t an official rental unit, lenders wouldn’t have a problem financing the deal. We played our cards right, found a lender willing to work with us, and moved forward.
Everything seemed back on track. But then…
The Title Search Disaster: A Sinkhole Inquiry from 2010
Just as we thought we had everything under control, the title search threw another curveball: a sinkhole inquiry from 2010. Now, let me be clear—this wasn’t an actual sinkhole, just an inquiry. But that alone was enough for the title insurance company to refuse coverage.
At this point, the seller started having second thoughts. Once they realized we were solving the financing issue, they suddenly wanted to keep the property. But after some strong (and slightly threatening but friendly) negotiations, we got them to stay committed to the deal.
The Battle with Title Insurance
Even though the “sinkhole” was just an old, unproven claim, title insurance refused to remove the exception from the policy. This was a big deal because lenders won’t fund a property with a sinkhole exception on the title.
I reached out to the CEOs of multiple title companies I’ve worked with over the years. Every single one of them said no. The problem was that, even though title insurance doesn’t actually cover physical damage from sinkholes, they still didn’t want to take the risk of removing the exception.
At this point, it felt like the deal was dead. But we weren’t going down without a fight.
Sinkhole Inspection: The Game-Changer
Instead of giving up, we decided to get a sinkhole inspection done. The results?
No sinkhole. Just normal settlement cracks.
Yet, to my absolute frustration, title insurance still refused to remove the exception. That’s when we had to get even more creative.
The Final Move: Finding an Insurance Company That Would Cover It
We discovered that most insurance companies no longer offer sinkhole insurance. Instead, they now use a term called “catastrophic ground collapse” insurance. The problem? Without the specific wording mentioning “sinkhole coverage,” lenders still wouldn’t fund the deal.
At this point, it seemed impossible. But we kept pushing, making calls, and working every connection we had. Finally, we found a title company whose underwriters actually agreed with us—they saw no real risk and agreed to remove the sinkhole exception.
60 Days of Pure Hustle Paid Off
From the moment we identified the seller to the day we closed, this deal took 60 days of non-stop problem-solving.
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We worked with multiple lenders until we found one that would finance ADUs.
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We restructured the property used to satisfy underwriting requirements.
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We fought against outdated title insurance policies that were based on fear rather than facts.
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We secured an inspection proving there was no actual sinkhole.
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We negotiated with insurance companies to get the right policy in place.
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And most importantly, we never gave up.
The Takeaway: Why Investors Need a Team Like Graystone
Most investors, agents, and even seasoned brokers would have walked away from this deal. Not us.
Graystone Investment Group isn’t just about buying and selling properties. We perform real estate surgery. We take deals that seem impossible, dissect the problems, find creative solutions, and get them closed.
If you’re an investor looking to work with a team that knows how to navigate the toughest deals, this is why you need to work with us. We don’t just talk about real estate—we do the deals that others call impossible.
Final Words
Never give up. Trust your instincts. Be confident. Deals like this separate the professionals from the amateurs. This is why Graystone Investment Group is at the top of real estate investment knowledge in Florida. If we can solve this, imagine what we can do for you.
A Word from Our COO, Jay!
“As the COO of Graystone Investment Group, I am incredibly proud of our team’s persistence and determination in delivering exceptional service to our clients. Despite the challenges we faced, we chose to overcome obstacles rather than allow them to define us. Through effective communication, collaboration, and a steadfast commitment to our clients’ best interests, we were able to conduct thorough due diligence and continue to deliver results. Our team’s resilience and dedication have truly set us apart, and I am confident that we are well-positioned to keep moving forward with the same strength and focus.”
