Seeking “Biggest Mistake/Lessons Learned” Stories for BP Magazine

[Melanie Stephens]

Hello BP Investors!

I am looking for stories about your biggest real estate mistake, and what you learned from it, for BiggerPockets Wealth Magazine. If selected, your story, name and company will be featured in the magazine.

Stories will include details about the property and project, the types of challenges it created and (knowing what you know now), what you would do differently. Stories will be accompanied by high-quality images (of the investor and/or project).

If you have an interesting story to share that has some great lessons for other investors, please post a few short details here on the forum, PM me, or email me directly at melanie @ biggerpockets.com. If it looks like it could work for the magazine, I’ll contact you for more information and then possibly a more in-depth interview.

Looking forward to hearing your stories!

Melanie Stephens

melanie @ biggerpockets.com

[Vincent Morales]

@Melanie Stephens

One of my recent investments. I purchased a house in Hampton Virginia, an out of state deal. My goal (was/is) to build a Investment business investing across the Country. I connected with a fellow BP member. House details, I purchased in 426 Chapel St Hampton Virginia, 23669. Purchase price was $65,000. Was planning on reselling at $160,000. I met the realtor that I hired and he showed me properties in January. I did my due diligence as far as area, and type of house and got a good feel of it, so I decided to move forward. Looking back, my due diligence worked, I purchased for $65,000 and sold for $159,900. My budget according to the contractor that I hired sent me a bid of $45,000 which in my experience where I have successfully invest seemed correct. Timeline, 60 days for rehab. Fast forward to the first day of work, contractor requested $10,000 for labor and material for a roof. I gave him $5,000. He finished the roof and started demo on the interior, so I sent another $5,000. My confidence in him was quickly growing with how fast they were moving. He requested another $10,000 so I sent him more money, there he started some framing, electrical, plumbing and drywall. He asked for another $5,000 for kitchen cabinets but and windows. (I bought the material, he mentioned he would deduct from what I owed him). I asked him to send me photos and updates, he rarely sent any photos and it took 3 days at times for him to get back with me. I knew in my head I gave him close to $10,000 to much already. At this point of the project we were hitting 3 months. I grew nervous and he kept asking for more money. I told him to work on the flooring before I send more, he acknowledged and said okay. Two days later he asks for money to pay his guys so I requested photos, again it took about a week to receive any. At this point we hit 5 months and my loan fees were growing. Fast forward I called for a construction draw, my lender gave me a lot less than requested. I then asked for photos of my project because my contractor rarely sent me any. Once I received the photos, I saw that only 30% of the work that I had paid for was completed. The contractor was getting further behind and decided to quit taking my phone calls. For about a month my project was sitting trying to find another contractor. Fast forward from this point, I hired another contractor who ended up more expensive than their original bid to me of $40,000 to finish the job. A lot of add ons and so called issues that came up. Job was finally complete and it took a total of 8 full months to complete (well over my 60 day timeline). The house due to horrible workmanship according to a lot of realtors in the area, the house took 3 months to sell. All in all I lost a little over $30,000 with extra time that wasn't anticipated and well over budget. What I learned was first get a home inspection not matter the cost so I know exactly the issues so that I do not have a contractor telling more issues came up. Hire the right contractor, interview interview interview. DO NOT PAY FOR WORK just because the contractor has to pay his guys. So many things I would change. Looking at the deal now, if everything went smooth with my contractor, the deal itself would have made money. I'm planning on moving forward in the future however I would like to organize and plan a lot better than I did. 

Apologies if the story is confusing or choppy.