“Dumb Luck”

by | BiggerPockets.com

I sat at a poker table and saw a Straight Flush be beaten by a Royal Flush. One of my friends told me of a convenience store clerk that refused to break a $20 bill without a purchase being made. To comply, my friend bought a lottery ticket and won $100,000. I jumped for joy as I watched the Minnesota Twins lose all three road games and come back to win the 1987 and 1991 World Series. I thought I would never see or hear about Dumb Luck as in any of those instances ever again.

Then one day…

Two years ago I was at the Travis County (Austin, Texas) foreclosure auction where both the foreclosure auction for unpaid mortgages and the Sheriff Sale for unpaid taxes were being held.

A mildly curious woman strolled over and asked, “What is going on over on this side?” I explained the basics of the foreclosure auction. She wanted to know how likely it was to make a higher profit with the foreclosure sale than with the tax sale. After explaining the differences and respective risks involved with each, the woman didn’t appear interested and even seemed somewhat annoyed that the foreclosure sale wasn’t a “sure thing.”

I asked her if she had any experience with the tax sale and she told me she had bought one property a year before at the Bexar County Sheriff Sale (San Antonio, Texas). I was curious and asked what she bought and how it worked out. She went on to tell me that she had bought just over a half acre of raw land (or a large vacant lot) in San Antonio for about $15,000.

She further explained that it had proven to be a headache for her because the property had some minor issues and that in the end it needed to be leveled. She shook her head and said that she wished she had known about those things before she bought the property. My eyes nearly popped out of their sockets and I quickly asked her, “Didn’t you research the property before you bought it?” She said, “No.” Shaking my head in disbelief, I asked why she hadn’t had the title researched, looked at the property in person or at least done some fact finding before her purchase. Her reply shocked me even more.

She told me that she saw that the property was located within the city limits of San Antonio and that of and by itself that would make it a good deal. Still shaking my head, I hesitantly asked her how much she had lost on it. She told me that she hadn’t lost any money and that she had done, “OK, I guess.”

After she bought the property, she had it inspected and she was told about the issues with the land and the substantial cost of the required corrections. She then had the property appraised. Rather than spend more money on it, she decided to sell it. However, she was quickly dismayed with how much she would have to discount it for a quick sale.

I clearly remember standing there, in utter amazement thinking to myself, “This woman has NO idea just how incredibly, unbelievably lucky she was.” To add to my frustration, she actually seemed annoyed with the outcome.

Yes, she had paid $15,000 for a piece of vacant land without doing any research whatsoever BUT that property just happened to be located a few short steps away from the world famous San Antonio River Walk! The land was valued at $1.5 MILLION DOLLARS!!! The woman was upset because after the necessary discount, she ended up selling it for ONLY $250,000 in CASH!

The woman thanked me for the information and strolled off not knowing that she was possibly the luckiest person the Bexar County auction had ever seen. As I mentioned above, I have seen Dumb Luck at the poker table, I have heard about Dumb Luck with my friend and the lottery and I saw Dumb Luck strike the Minnesota Twins…twice but I doubt I will ever hear about “investor” Dumb Luck comparable to this ever again.

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  1. Great story! People never cease to amaze me! I could probably sit here and write 100 or more pages on the amount of people, I work with regularly, who have absolutely no clue.

    BTW I had 4 aces beat by a Royal Flush once, in a game of Hold ’em!!!

  2. What amazes me is that after hearing that the property was worth $1.5 million, she chose to discount it by over 85%, instead of maybe borrowing some money or taking on investors to bring the land up to spec. I’m sure she would’ve made an even bigger killing…

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