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What was the biggest mistake you ever made?
By sharing our war stories, we can all learn ways to avoid mistakes.
Jackie
I’ll go first….
One time I got a deal on the other side of town. Normally I would just wholesale the deal if it is more than 30 mintues from my house, but this was a REALLY great deal so I wanted to rehab it and sell to a retail buyer. Plus, the house had some really neat stuff in the house and I wanted to go through it all. I got a $115,000 house for $25,000 and it included the full contents of the house. I got a 1987 Mercury Grand Marquis with 40,000 miles and it still smelled like new leather it had been kept in the garage mostly. Theodore Havaland china from the 1800’s, a piano, Scandinavian dining table, antique fly rods, a lot of wooden fishing lures, …. JUST LOTS OF GREAT STUFF.
Well, because the house was on the other side of town, I thought I would get a good friend who lived 20 mintes from the house to be my partner on the deal. After I got all the “stuff” I wanted, he could manage the rehab and take care of getting the house sold.
I bought the house and he was to pay for repair costs. We would each have about $25,000 in the house.
Well, 2 weeks in to the deal, he was “a little short” for this or that and before long I was paying for everything.
To make matters worse, the house was not getting fixed as fast as it should and it became apparent that he was not managing the rehab project so that made it necessary for me to drive 1 hour and 15 mintues to go check on the house several times a week.
Then– his wife got real sick. A week later, she died. And as you can imagine, he was a basket case and could not do anything with the property.
The full cost and responsibility got thrown in my lap…. but the BIGGEST MISTAKE I MADE was to make him a partner in the deal.
Even though he had no money invested and did not do anything to get the house fixed up or sold, he was expecting half of the money.
NEVER EVER EVER have a partner with a real estate deal…. that was the lesson I learned. ( I guess I should clarify that to be no partners that you don’t know and trust really well.)
If I would have known then what I know now, I would have structured the deal on a performance basis and not given him any right or title to the property.
Knowledge is golden! That money you spend on education, seminars, and CREWealth.com will pay you back over and over again in the knowledge you gain to structure deals better and to avoid BIGGEST MISTAKES… but only if you put the things you learn in to action.
Ok — it’s your turn…. what’s the biggest mistake you ever made???
Jackie
Trusting contractors to do what they say and trusting a partner/friend which is leading to a $40,000 loss of cash! The contractor knew my mother was very sick and I spent most of my time taking care of her and very little time supervising him.
I really need to learn not to trust anyone–and I hate the thought of doing that.
Any suggestions?Jean
Made plenty of mistakes (hiring contractors, paying them and finding out they never paid the subs and vendors (fixtures, lighting companies) and weren’t licensed so I got stuck paying them 2ce to stop the holding costs bleeding and get r done to sell, listening to realtor’s advice on what something is worth and putting up too high EMDs on a deal, feeling sorry for a lease option tenant and being a charity and refunding them the $10,000 lease option consideration, using my credit too much on deals in the lending frenzy of the last few years, hiring the wrong folks, etc.)…
…Whew…but I’d say my biggest mistake was not LISTENING TO MY GUT…whether it was about a specific deal, doing business with a partner etc. – it seems my gut was always right and boy – would have saved me lots of money if I tuned in better to whay my gut told me.
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