Updated over 2 years ago on . Most recent reply
Recent real estate failure
I closed on a property in Warren, MI on Oct 20 and I quickly found out through my property manager that the house is in a horrible area and won't fetch enough rent to cash flow. I was too giddy to get another property and my first ever property I bought in Texas was successful. Unfortunately, I am putting the property in Warren up for sale tomorrow and I expect to lose 25k. My lawyer, PM, and financial advisor assessed the risks and we agreed to flip it. I guess this can help save future investors this experience by letting you know to not buy a property for the sake of buying one. I also believe in David Greene's philosophy of buying in nicer areas and not downtrodden cities in the Midwest like Warren or Detroit now. I hope this helps anyone looking to buy right now. Personally, I would just wait it out and save your money. What's the worst that could happen? Sitting on a nice, big pile of cash? I'll lick my wounds and onto the next successful one!
Most Popular Reply
I have no idea if it's an L or not, but if it is, I appreciate your ability to recognize it, own it, and move on. That unvarnished ability to recognize a situation seems rare in this ever hopeful world where everyone seems like they'd rather complain and justify instead of accept, learn, and move on.
Having said all this, make sure it's actually an L before you sell. It takes a long time of losing a little bit of money every month to get to 25k. If you hold on long enough, you might come good through inflation alone.
Best wishes