School of Hard Knocks

[Gary M.]

I had this fantasy that when I did my first deal I would become a paying member of BP and then amaze all with my tale of success. Alas my tale of success will have to wait and in the spirit of honesty and reality I present my tale of hubris and bungling.

I'll start with the moral of the story which is do your due diligence. I found a FSBO triplex which has been vacant for a couple of years. I brought the property to the attention of a local investor who has been a great help to me as I learn the ropes. He looked at the tri. and told me that if I got it under contract he was certain he had a buyer for it. I had no reason to not believe him, he's a seasoned investor, he did his own estimates of the repairs needed, he has been doing this for a while and has sold multiple properties to the buyer in question. What could go wrong? Well, the buyer said "no". After that I decided I would estimate repairs. So I walked through the house and imagined the worst case scenario for repairs and I was so far from 70% it wasn't forgivable. If I estimated for best case scenario I ended up at 100%!!! I have contacted quite a few investors and nobody wants to touch it. If I had run the numbers when I was supposed to I wouldn't be in this situation. I don't blame my investor friend, he does feel like crap though. I've done my studying into REI, I know better, I should have done the work myself.

The worst part is that the seller is very upset.

Fellow newbies, learn from my failure. There are no short cuts.

Humbly yours,
Gary

[Account Closed]

I always say "it's never over till it's over, and maybe not even then." That saying really annoys the husband and children, but applies to so many RE situations.

Tell the seller you are sorry and that everyone on your team really thought the deal could be done using the contract price. Tell the seller what you found and back up values with major repair costs and recent comps. Let him know what you can do, and tell him to please keep you mind if he doesn't find the offer he is looking for. Stay on it until the property is sold or the seller tells you to go away.

I'm guessing you might respond and tell me that the seller isn't speaking to you or that you don't want to call him again. If you can show me that you contacted him and tried to make the deal work again as suggested above, I'll pay for the first year of your BP account. The seller doesn't have to go for it. You just have to put it out there. Do you accept the challenge?