How fear cost me $73,000

[Bernard Chouinard]

I'm still a newbie investor and to be honest, I'm not sure at what point I'll consider myself novice enough to not be considered newbie. As of today, the deals I've done are several flips, 1 SFR rental, many wholesale deals, and even some private money lending. I've read (audio) several books listen to hundreds of podcasts, attended many REI events and met some very wonderful people. Today, the one deal I was working where fear got in my way is really what I want to talk about. Now please bear with me, I'm not a writer, hell I know my grammar is horrible but thank god for Grammarly, but one thing I've always been is an entrepreneur. I've ALWAYS found ways to make money which is why I'm in enterprise sales. I love to find ways to make money its a game and I absolutely love it!

Let me just get right to the point of my post.  About a year and a half ago, I had a response to one of my marketing letters.  It was an owner of a 3 unit building, 2 bedrooms each, in the town of Fitchburg Massachusetts.  This is one of those towns that is going very well with rentals but also one of those towns where the valuations of properties can very greatly from one street to another.  This woman reached out to me with a 3 unit building for sale.  Her son was living on the top floor, the 2nd floor was rented by a long term tenant and the first floor was vacant.  It needs some work as each unit needed to be updated, there was some roof damage that needed to be addressed and it had a snowman in the basement, ie asbestos covered furnace.  Now I've seen this in my wholesaling and I personally have never delt with them.  This was not in use but still there with some other pipes covered.  In my research and in speaking to veteran investors I've learned that they would just leave it alone and not do anything with it.  I managed to have the owner agree to a purchase price of $180,000 with owner financing.  The problem I faced was that the town assessors had this building at 9 Bedrooms total (3 Br per unit) when in reality it was a 6 bedroom building (2 each unit).  I let my fear get in my way and was unsure as to how to proceed.  The rental income of 2 bedroom apts in this town didn't go for much and previous sold comps at best were around $190 in much better shape, no work needed to $55K with work needed.  I couldn't pull the trigger, it didn't seem to make sense to me, again the newbie investor and after talking to others, I was convinced to renegotiate to $90K.  Again, similar buildings sold for $55-60K so my thought process was $90K owner financed would be a good deal for her and fair to me.  

Today I decided to check on the property and in August of 2019 I find that property was sold in the same condition for $253,000.  My heart sank.  Did I really just lose out on a $73K profit because I was too afraid to pull the trigger?  I could have simply bought the building with little money of my own then turn around and put it on the market if I didn't want to deal with the updates to make it rentable.  

Lesson learned here.  Don't' let fear drive your decision making.  Run the numbers and if they work, then they work.  I'm certainly kicking myself for this one but there are plenty of other deals out there to be had.  I'm in the middle of 2 flips and ramping my marketing back up to get my wholesaling going with some cherry-picking of my own of course.  Am I a little upset that I allowed this to happen.  Of course, but I've learned from it and I'm moving forward.  I'm only posting this to share my experience.