How I lost 25K. Distracted and Frustrated Newbie

[Jason Brown]

Hey BP,

Forgive the lost post. 

So this just happened. I'm an investor based out of Miami and am currently in the middle of my first buy and hold deal which is currently under renovation with the hopes of making it a successful BRRRR. I had landed this deal by sending out some direct mailers a few months ago which put me in contact with a somewhat motivated seller who had multiple properties that he was trying to unload. I really liked one property because it was in a nice up and coming area and had very close proximity to downtown. The problem with it however is that as I did my walkthrough with my inspector it became obvious that it wasn't in as great a condition as the seller had led me to believe.

There were issues with termites, the electric was really not up to code, the HVAC was complete trash, there was mold, and the inspector had doubts about the health of the roof because he couldn't get into the attic to inspect it because it had been sealed off apparently for who knows what reason. Altogether I was looking at about 30k in renovations BEFORE we even got to the more topical kitchen, bathroom, and painting upgrades. 

Because of the area I knew the property had an ARV of 150 and would definitely sell for 100K the way it currently stood. So after my inspection I showed the seller the results and told him that I would like a price reduction of 10K which would have brought the price down to 70K (we were under contract for 80K). He agreed but only if i would also purchase a second house which was not in as great an area but was structurally much better maintained for another 70K to which I also agreed

Now i didn't have the cash necessary to buy both houses but I agreed anyways thinking "If I've got the deals the money will find me". Anyways before i could send him the amendment to the contract for the price reduction he tells me he's got another buyer for the original property that is willing to pay 80K so he wants to at least get 75K from me for it. 

NOW HERE IS WHERE MY REGRET COMES IN...... I KNEW that property was worth in its current condition 100K EASILY but I told him I would have to pass and only ended up buying the other house in the not as great area because I was scared about the overall condition of the first house and I didn't know what other huge problems might have been lurking that I wouldn't have been financially prepared to tackle during the renovation. 

Anyways the other buyer was clearly a wholesaler. They also knew what the house was worth and as soon as I passed they offered him 80K for the house and SOLD it the very same day for 100K. Some else made a quick 20K dollars on a property that I could've made 25K had I kept it and done the same thing. 

Obviously I applaud the other party for taking action and being successful but this really makes me question my business model of buy and hold if it seems you can make money faster wholesaling without any of the other hassles I'm currently learning through (renovations, tenant screening, refinancing etc)

I hear a lot of times on BP about staying focused and not following everything that glitters but it sucks thinking that I gave away 25K in easy cash. Has this ever happened to anyone else?