Second Deal Was A Loser, But A Valuable Lesson

[Michael Carbonare]

Following up this post about my first deal, I want to talk about my second deal which had a decidedly less profitable result.
With $30K in my pocket and an inflated sense of my wisdom, I quickly launched into my second deal, another bank owned property.  But this one was quite different than my first.  That first house was a beauty in a desirable suburb.  This second deal was a boarded up house in a rough neighborhood.  There were warning signs from the get-go.  The crack vials in the driveway should have sent me running, but that early success had me feeling invincible.  Stop signs be damned, I hit the gas and bought the house.
The location was in the northeast, Long Island, my hometown.  Among the work that needed to be performed, the heating system was at the top of the list.  The furnace was absent, (who takes a furnace when they leave town?).  I hired a plumbing contractor and proceeded to have a new furnace installed along with the needed copper piping.  The job was done, paid the man, and went home.  Returning the next day to get started on the next project, when I pulled up to the house I see the front door ajar.  "This can't be good", I said to myself, and cautiously entered the house.  No one was inside, it was empty. . .as in the new furnace and the pretty new copper piping were gone!  I had a knot in my stomach the size of one of the Kardashian's legendary backsides.  I'm thinking the same SOB who left crack vials in the driveway sold my new heating system for scrap money to buy more juice.  Ugh!  I was crushed.  After a few sleepless nights I decided to sell the house.  Another investor, an investor smarter than I, took it off my hands.  Why was he smarter than me?  Because he bought it for $25K less than I did.  Needless to say, this took the wind out of my sails and I crawled off to the sidelines to soothe my wounds and ego.  I wasn't the smartest guy in the room after all.  Looking back, this second deal, the loser, was the more valuable of the two.  It made me realize I knew just enough to be dangerous to myself.
I took a break from real estate.  Life events happened.  Got married, became a dad, and decided to Break Bad and we moved to Albuquerque. . .andbecame  serious about real estate.  To be continued. . .