What Did You Get Wrong

Question

We all make assumptions and draw conclusions, only to find out later with new information that we were wrong. For some people "being wrong" is hard. In fact some people double down on incorrect beliefs, even after conventional wisdom shows they are wrong. Part of this is ego and the need for self preservation. Admitting we are wrong can damage our self confidence or we think it hurts our credibility. Holding on to false beliefs is even more damaging.

I would argue that self reflection and the ability to change our mindset extremely important. What are some views you previously held, that you have not evolved your thinking on?

Please keep it real estate related.

I would argue that self reflection and the ability to change our mindset extremely important. What are some views you previously held, that you have not evolved your thinking on?

Please keep it real estate related.

Tanvir Sattar · Answer

Setting my asking price too low. My first investment property was with my Dad and it was also out of state. We made a good return and we were ready to invest closer to home. When we bought our property it was on the market for 90 days and when we sold it was not even on the market for 24 hours. Our Realtor was very helpful in setting the asking price, but in hindsight when it sold that fast we had it priced too low.

Bridgette Delva · Answer

@Joe Splitrock I love this question! I had to think about this for a minute and I’d have to say “it takes money to make money” has always rang in my head with investing or starting a new business and I think it still holds true today, even with all the knowledge and experience and networking. However I will say that my view has evolved because I now know that it doesn’t have to be MY money to make me money.

Joe Splitrock · Answer

This is a tough one. Every time you sell fast, it is easy to think, "how much more could I have gotten." The interesting thing about pricing properties is that even $5000 could have made the property sit. I have been on both sides, having stuff sell fast and having it sit. I would always rather have it move fast.

Honestly every negotiation I have ever done, I wonder if I could have gotten a couple more bucks.

Joe Splitrock · Answer

In the past there were deals that I passed on because I thought they were too expensive. Today I reflect back on some of those deals and realize they were AMAZING. I passed on too many good deals to count.

Satyam Mistry · Answer

@Joe Splitrock Hello Joe, great question and perspective! I am interested to know your answer for your question. What are a couple of the biggest realizations you had in real estate or changes you made in the way you thought about and ran your rental portfolio? Thank you.

Bridgette Delva · Answer

@Joe Splitrock one more thing I forgot to add is that my early mentality really crippled me from starting investing much earlier in life. I truly thought I had to have a big stash to get started.

Ujwal Velagapudi · Answer

In the market that I was in, I thought I could easily get my properties to sell, especially given the cash flow. It took my about a year of very passive attempts, off market, and about 3 of those latter months a bit more aggressively to actually sell. My CAP rates were in the mid to high teens, with consistent bank statements to prove it, as well as long term tenants, and no capital expenses needed. It just took a lot longer than I had thought since I was in such a niche market, but for the few people that knew its value, I'm sure it was gold.

Not sure if this would be considered wrong, but more a mistake and learning experience, but I have gone out and hired too many cheap, unprofessional contractors. Sometimes I've gotten great deals and they've done the job for me. Other times they did a half way job, only for the issue to come back again. This primarily involved roof jobs on our flat roofs.

Never pay a contractor 1/3 up front, and another 1/3 for doing very little work. This guy just ran off with my money and never finished the job, and the little he did I could've gotten done for 1/10th of the price.

I've gotten my judgement wrong, which I have learned from. I saw the dollar bills that tenants had in security deposit + first month's rents rather than their entire application. I've learned to say no to people who just simply have enough money to move in, and to dig in deeper into their income, rental history, employment feedback, etc. This has burned me a few times until I finally learned.

I was definitely wrong in that I thought I could easily get a mortgage given my near perfect credit and enough down payment. This was my first property before I knew anything. I was looking to get a loan on a $20,000 small commercial building, walked into Chase bank, and got laughed out. My tax return that I had barely had a few months of W2 salary since I had just graduated college that year and worked for less than half the year. I tried numerous times again, each time having it contractually that I will obtain financing to close (since I thought it would be easy), and they had all fallen through. I learned I needed to have cash to close some, I needed to bolster my personal lending profile, and also needed to know the properties I was buying better to know whether or not they would qualify for certain types of lending.

Chris Stroup · Answer

My biggest mistake was staying married to my ex-wife for too long.  Ignoring all other reasons, she wasted all of our money on nothing useful.  I made a good amount of money when I deployed and traveled and I wanted to invest all of it.  Over 10 years of marriage and time in the Army we invested very little.

Now that I have moved on, investing is going much better.   If I would have gotten out of that relationship years ago, I could have been financially free by now.

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