There's strength in that HOA

Real Estate Agent with Keller Williams

We have had amazing turn of events here with the leasing going on for the Barnett Shale.

Most of the past leasing in subdivisions has been paying the homeowners about $1500 per acre.  And with about 5 lots per acre they have been getting about $300 per lot for an upfront bonus.  On top of that, most of the owners have been getting about 18.75% to 20% royalty interest.

Well, now some of the HOA have gotten smart and are banding together to negotiate the lease for the entire subdivision.  I am pretty amazed that they were able to get everyone together.  I have been in several HOA's in the past and most of our meetings had a lot of loud language.  Seems everyone had their own opinions about block parties, halloween events, etc. 

Well, it appears that when money is involved the people are a little more agreeable.  When there is one entity to negotiate the lease it is amazing what can happen.  Instead of getting $1500 per acre, or $300 per house lot, some have been getting $15000 per acre, of $3000 per lot.  Now I am not a math major but I do know that zeros at the end of dollar amounts, before the decimal point, are a VERY GOOD THING.  They also got 27.5% in royalty interest. 

This may not sound like much to some of you but a free $3000 that drops into my lap is a very welcome event.  If you were lucky enough to have about 2 acres for your homestead, and they drilled a good well, you might be looking at 6 figures in future income.  Not bad for something that you probably didn't know you even owned.

If any of you out there are facing mineral right issues give me a shout.  I don't know it all but I am willing to share the knowledge.

Talk to you next time.

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