All Forum Posts by: Alex Russo

My very first wholesale deal..

I went out and looked at this house, the inside was demolished. The kitchen was destroyed due to a leak in the roof that was above the kitchen that was never fixed, so the ceiling had developed mold. 

This was my second house that I had physically stepped in since I started wholesaling, but I knew I could get a deal on this house. I bought the house for $80,000. Here's where I went wrong.

#1. I did not bring a lockbox. I didn't even know what a lockbox was, and I think that cost me tens of thousands alone, because I was not able to bring in as many buyers. The person who bought this house, never even saw the inside, only pictures. If I was able to show the inside, I'm sure I would've been able to get more money.

#2. My negotiation skills. I don't think I did too bad, but I know I could've dropped to at least $70,000. I wanted that first deal, and thought each house I visited would be this easy.

All in all, I made $10,000 on my second house, which isn't bad for a beginner, but knowing I could've made $30,000-40,000 hurts me now that my mentor tells me haha. Oh well, NEXT!

I've got a whopper, @Alex Russo.  This happened over 10 years ago.  I discovered a builder that developed communities of duplexes and sold them off individually to investors.  Moreover, they had other divisions that covered the whole process—from non-owner occupied financing to property management and being a 1031 intermediary.  I sold a duplex with the intent to 1031 exchange into a duplex within one of their new communities.  Long story short, the people overseeing the operation were fraudsters.  I ended up testifying to the Grand Jury to help get the indictment.  Then, I was the second guy the DA put on the stand at the official trial.  So many people were victims of fraud, and the head person received ~130-year prison sentence—the largest sentence ever given out for fraud in the State as of that time.

Whenever I tell this story, people always tell me this is not my gaf, because bad, dishonest people were involved.  However, reflecting back on that, I wish I would have done more due diligence on the people involved.  I can't say for sure that would have made a difference, but that's one of the biggest things I took away from that.

Fortunately, I didn't lose more than I could afford to lose.  And, I always say that was my PhD in real estate.  However, I really feel bad for some of the other people who were affected.  There were people who lost a LOT more.

Mark

In hind site not starting younger/taking greater risks, or maybe getting married. Both are intertwined.

No on second thought.....Defiantly getting married, more a life error than a career mistake.

Buying a "pre-construction" condo in 2006 and hoping to flip it quickly!

Not moving to Oregon full time in 1992  when I new exactly what was happening in the Export log business and the local realtors and land owners did not... I only worked for a few months a year then coasted.. if I would have just not thought this would last forever I would have move up .. jumped in and have been retired by end of the 90's no sweat and would be simply logging a stand every year for my cash flow... No tenants No Toilets and huge MONEY.. oh well.