What’s a key mistake you’ve learned from that could help others?

To give you an idea of how we approach it, we assume the worst-case scenario right from the start is 9-12 months of no rent, $5,000 in legal fees, and an additional $5,000 in expenses to deal with moving their stuff, putting it in storage, and dealing with health code violations or NOV's from the city during the process. 

If you think there was fraud, you may have a case, but you will need to spend money to pursue it, and at the end of the day, it very likely won't yield any results, other than less money in your bank account, and worst case, you could be countersued, as some sponsors have threatened.

Mistakes made – Lesson – Learned.

I see so many new investors that lose thousands, sometimes tens of thousands, every year because they make simple mistakes.

Expect another brutal year for investors in the South and Southwest, particularly in Texas and Florida, and particularly in Austin, TX - perhaps the worst positioned market in the United States for returns in year 2025. 

But I am not trying to sell the note, I will continue to hold it, and in the worst-case scenario, the borrower will become current, or in the best-case scenario I will foreclose and gain equity.

It has yet to happen for an RE related event but my last threat of being sued was last month (and unlike most suing threats, we had made some minor mistakes on this one).

I would look at it in terms of whether you can afford a worst case scenario where you're covering the deductible and have a credit line or cash to front the re-build cost and getting reimbursed from insurance afterwards.

Can it be done wrongly, illegally and be a big mistake?