Learnings from My First Property

Greetings, my friends!

I recently posted in the Starting Out forum about finding my first property.  If you're curious, it can be found here.  Basically, I lost the property almost as quickly as I found it, which has led me to think about what I can learn from this situation.

Investment learnings:

• A cash offer has considerable leverage over an offer with financing.
  
  • The cash buyer's ultimatum triggered a response, that perhaps an offer of the same amount requiring financing would not have.
• A cash offer will most likely get a higher ROI.
  
  • The seller's reluctance to accept the cash buyer's offer points to the offer being considerably lower than what was desired by the seller.
  • Since my offer was going to get me almost 30% ROI, the cash offer may have a much higher ROI.

Personal learnings:

• I still need to do some work on calculating my offer price.
  
  • While I would have been happy with the offer I was going to make, clearly there was some wiggle room here that I wasn't aware of.
  • This has to do with my own self-confidence, as much as my desire to offer the seller a fair price.
• I need to look closer at the emotional response I had to losing the property, to understand it's ultimate source.
  
  • I don't believe that emotions have no place in business, but I do need to understand why I took this so hard.
• I need to be more on top of local real estate.
  
  • I thought I was doing pretty well staying on top of new properties and being able to identify their potential, but I missed this property since I am still tweaking my search filters.
  • I need to request walk-throughs much sooner than I have been and stop worrying that I'm wasting someone's time.
• Consider making cash offers in the future, once my capital has been built up.
  • This would improve my own leverage and potentially increase my ROI.

Thanks for sticking with me to the end!  Until we meet again, peace out.