What Lessons have you Learned?

Question

I was hoping as many of you awesome professionals as possible might share some of your biggest failures/ lessons learned. I know in the end, it made you better, smarter, and more resilient. I, of course am looking to learn as much as possible from every direction!

Sam Lewis · Answer

Great question!

My biggest failure was doing all the work on my first rehab myself. I remember sitting on the stair steps of the property covered in blood after accidentally hacking myself with a saw.

It was not fun!

Once I realized "saving" money on labor costs wasn't worth it and that it actually slowed down my rehab two-fold, I became a much, much better investor : )

Kenneth Garrett · Answer

@Beliria Sims

Don’t go to fast.  I went on a buying spree where I bought 7 properties in 60 days.  Unless you have the resources to scale that quickly, take your time.  I do mostly BRRRRR projects, I ended up flipping half of them.  It all worked but it was stressful.  It’s all about moderation.

Daniel Haberkost · Answer

@Beliria Sims My input would be regarding goals/mindset more above anything else. The first podcast I ever listened to was centered entirely around large multifamily. Every guest "owned" hundreds or thousands of units and that's what I thought success had to look like. Several years and a few strategic acquisitions in and I realize how completely arbitrary many of the parameters we all focus on are. Figure out why you want to invest, set your goals accordingly and don't worry what anyone else is doing.

I also strongly agree with @Sam Lewis, don't do your own rehabs! I didn't end up covered in blood but I have absolutely zero idea of what looks good and you would probably laugh if you saw some of the colors/finishes I put in my first rehab.....

Good luck!

-Dan

Ujwal Velagapudi · Answer

So in those cases I should've specified it was for smaller operating transactions, not an actual asset purchase/sale. For example the dozens of folks that have guaranteed they will lease my unit with cash in hand "tomorrow", the numerous contractors that have said they will arrive at X time for the emergency plumbing/heating/electrical work, or the tenants who say they'll have the money in by X. I've learned to just always keep a back up for contractors, have tenant pipelines, etc. I made the mistake of holding a unit before and not showing it thinking that I had a done deal with a tenant who was going to move in, only to find out they backed out for whatever reason. Seems like common sense now in hindsight as I'm typing this out, but I had to get burned a few times to realize it.

Beliria Sims · Answer

@Scott Krone That's REALLY good! I think a lot of new business owners overlook the value in creating sustainable systems. I've heard it said that it's better to pay people to do what you don't want or don't have time to do. Seems like you were smart enough to know that with buying your system updates! Thanks for that poignant and insightful response.

Ujwal Velagapudi · Answer

Don't believe something to be over just because the other party said so, you shook on it, or even if you have a signed contract in place. Emotionally be calm and composed because you will have instances where a signed contract falls through, a handshake agreement doesn't end up turning into a signed contract, and a verbal agreement ends up nowhere. Just keep persisting and make sure you see the whole entire process through. I learned this over many failed "agreements" in multiple formats, and learned to be calm & steady throughout and just focusing on completing the project at hand.

Scott Krone · Answer

@Beliria Sims - When I first started my own firm, I established systems for the company (filing system, book keeping, specifications for each trade, draw requests, loan packages, etc).  Most of which we still use 20+ years later.  More importantly, we can still reference back to earlier projects.

Your question is what was our biggest lesson.  Well approximately 15 years into our firm, we implemented additional systems.  It was through the use of these systems that I discovered the biggest issue to date that we have had to deal with.  In order to address it, we had to re-organizing the company.   I realized that despite the fact we had good systems, and the systems revealed the issue, we needed to further develop the systems so the company could 1.  recover and 2. grow.  I had a choice.  Either build them myself or purchase them.  I choose to purchase them due to timing.  Now everyone in the company is hired and trained within those systems.  We incorporated them into the existing systems.

So, the biggest lesson, create a strong foundation for the long haul, not the immediate.  When you look back you will be grateful you spent the time early on focusing on the fundamentals.

Beliria Sims · Answer

@Daniel Haberkost That's great advice on so many levels. Not only real estate. I think that's a good life lesson period. It's so easy to get caught up in what you see the next person doing or what they say. It's absolutely important to define success and what you want for yourself.

I'm sure your color scheme wasn't that bad. I like lots of color myself, so I might've thought it was cool. LOL! I'll definitely take that advice as well. Good thing I have a partner who's an interior designer as well!

Beliria Sims · Answer

@Sam Lewis

"covered in blood"?!?!? YIKES! That sounds like a painful lesson to learn. I learned something similar while listening to the BP podcast. I think it was the episode with Leka Divatha (hopefully I spelled her name right). She was talking about how she doesn't feel like she needs to have all the answers, she only needs to know where to find them, ie hiring someone else. My mentor also has a saying that "cheap becomes expensive". Thanks for your feedback!

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