Shelly and I have always been driven to help people, especially those facing tough times. Having come into the real estate business during a challenging period in our own lives, we understood hardship firsthand. However, one deal taught us a harsh lesson about balancing kindness with caution—a deal that nearly ended our business before it truly began.
It was the end of our first year, around Thanksgiving, when we received a lead in Massachusetts. The situation seemed straightforward: a family was facing foreclosure on a well-maintained home. They were struggling to find a new place to live and needed financial help to secure their next steps and provide Christmas presents for their children. This really tugged at our heartstrings, especially because I remembered my own struggles during the 2009-2010 financial crisis. We wanted to help this family avoid that pain, so we decided to loan them $5,000, expecting it to be repaid at closing.
At that time, we had about $10,000 in our business bank account, so this loan was significant for us. We quickly put the house under contract and started looking for buyers. However, our buyer's list was limited—only about 200 buyers—and after several potential buyers passed, we finally secured an offer for a $5,000 assignment fee.
As we approached the closing date, our buyer began dragging out negotiations, which added to our stress. Then, on the day of closing, the buyer revealed a major issue: there was a second loan on the property, an additional $60,000 over our contract price. Our title company had completely missed this in their search—a critical mistake that blindsided us. The deal fell apart, and not only did we lose the $5,000 assignment fee, but we also lost the $5,000 we had loaned to the sellers, who admitted they knew about the second loan but never disclosed it to us.
When we asked the sellers to return the money, they told us it was already spent on Christmas presents and moving expenses, with no intention of repaying us.
This experience was a painful wake-up call. We learned the importance of thoroughly vetting our title companies and double-checking every detail. It also taught us that not everyone is as transparent as we’d like to believe. While it’s good to help others, you must protect your business first.
Today, we’ve refined our processes and now consistently earn an average of $35,000 per wholesale deal with minimal stress and mistakes. This deal was a tough lesson, but it ultimately strengthened our resolve and taught us invaluable lessons that continue to guide us today
