Here’s the Worst Real Estate Deal I’ve Ever Done: What’s Yours?

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I like to stay as positive as possible, but that does not mean I do not think about my mistakes and learn from them. I have made many mistakes in my real estate investing career, and each of them has taught many lessons that have made me a better investor.

I think many people are afraid to take the plunge and buy a property or invest in a real estate deal because they may make a mistake. We all make mistakes, and the more mistakes we make, the more we learn! I have learned a lot over the years.

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My Biggest Real Estate Investing Mistake

The biggest mistake I made was trying to fix up a flip myself without a contractor. I thought I would be saving money by doing all the work, but in the end, I lost a ton of money because it took me so long to do the work. I didn’t know what I was doing, and I lost a lot income because I spent so much time on the flip; I did not have time to sell real estate.

Related: 4 Common Maintenance & Repair Mistakes Property Managers Make

The house I tried to fix up was about 100 years old and needed new windows, doors, paint, carpet, kitchen cabinets, counters, appliances, lighting, texture work and much more. I think it took me almost 6 months to do the work, and that was after having some contractors help me with the big jobs. I had my worst year ever in real estate because I barely made any money on the flip, and I made no money selling houses or on other flips.

What I Learned

I learned a lot from fixing up that house. I learned how to complete many repairs on houses and what it takes to do certain jobs. I also learned that I should never do the work on a flip or rental property again because my time is so much more valuable doing other activities. I also learned that even though contractors will cost more than doing the work yourself, they make up for that cost in the time they save you.

Other Big Missteps

Another big mistake I made was buying a fix and flip at a foreclosure sale for too much money because I did not have many flips going, and I needed a project. My max budget going in to the auction was $190,000, and I bid up to $200,000 when it was all said and done.

I thought I still had plenty of room to make money, but things did not go as planned. For one thing, I could not see the house before I bid on it, and I assumed it would be in better condition than it was because it was in a nice neighborhood. I also assumed it would have a finished basement because of the age of the home — and almost every house in the neighborhood had a finished basement.

It turns out the house had been smoked in for years, and the basement was unfinished. It needed about twice as much work as I assumed it would need, and I had already bid more than my budget allowed for. In the end, I lost money on the flip, which had only happened one other time in my career.

More Lessons Learned

I have since stopped buying at foreclosure sales, not because of this deal, but because of the increase in prices at the sale. I learned some very valuable lessons when I bought this flip and lost money on it, including:

  • Don’t bid more or offer more than what the numbers say you should offer. I let my emotions get the best of me, and it cost me a lot of money and time.
  • Don’t assume a home is in average condition or has amenities if you are not sure. I thought the exterior of the home and the neighborhood suggested the home would be in better shape than it was, but I was wrong, and that cost me. I should have remembered that people who lose their homes are usually not motivated to maintain their house, and it doesn’t matter how nice the neighborhood is. In fact, the nicer a house is, the more it will cost to repair because the buyer will expect higher end finishes.

I’m a Better Investor for it

Even though these two mistakes cost me thousands and thousands of dollars, they saved me much more money in the long run. I learned how to improve my business and how to make more money. If I had not made these mistakes, I may have made even bigger mistakes in the future or gotten stuck repairing flips myself and making much less money.

Related: How to Analyze the Real Estate Market to Avoid Major Investing Mistakes

I had ten flips going at once earlier this year, which I could not have done without using contractors.

If you’re worried about making mistakes and feel you can’t pull the trigger, remember: the more mistakes you make, the more you will learn and the better investor you will become.

For the experienced investors out there, what is the biggest mistake you have made?

Let’s share our worst mistakes (and lessons learned) in the comments section below!

About Author

Mark Ferguson

Mark Ferguson is a has been a real estate investor and real estate agent/broker since 2002. He has flipped over 165 homes in that time, including more than 70 in the last three years. Mark owns more than 20 rental properties that include single family homes, as well as commercial properties, including a 68,000 square foot strip mall. Mark has sold more than 1,000 homes as a real estate agent and is the owner/managing broker of Blue Steel Real Estate in Greeley, Colorado. Mark started the InvestFourMore blog and website in 2013, which has hundreds of article on real estate. Mark is constantly sharing his insights, case studies, and interesting things that happen to real estate investors on both his blog and well-known sites like Forbes.


  1. My biggest mistake was buying an old home to fix and flip and when conducting the inspection I did NOT have a plumber run a camera down the sewer line. A plumber did do a walk through inspection, e.g. flush the toilets,
    run the dishwasher etc. but it wasn’t until I sold the property for a nice profit that the new owners, a husband and wife with three teenagers, notified me the tubs, shower etc. were backing up. After digging up half of the back yard we called a company that used cameras for sewer inspections and yep, over the years the line had broken and shifted in several places. No huge problem I thought, we do a little trenching and run a new line. The problem was the main hookup was at the back of the house and the sewer line ran directly under the neighbor’s property to the street juncture. I had to run a new sewer line up the driveway and then 1/4 mile of street to hit the nearest hookup. Poof!!! My $40,000 profit vanished.

    The moral of my story? If you are buying a house that hasn’t been lived in for years or an old house, pay the $300 and have the sewer line checked.

  2. Mindy Jensen

    My biggest mistake was hiring the cheapest contractor – who happened to be located 45 minutes away. They underbid the project, and were not motivated to finish it up. What should have taken 3 months took 6, and we were living in it during the remodel. We had one of those 100-year storms the night after a horrible wind storm ripped all the tarps to shreds. Water came in everywhere! We purchased in 2006, and then the market took a huge dump. We ended up hiring someone else to fix all the problems. The kicker is if we would have hired him in the first place, we probably would have paid about the same that we paid to the first guys, without the added expense of hiring someone else to fix up the mistakes. Sigh.
    Do your homework on your contractor and hire someone who is local.

  3. Stephen S.


    I like to stay as positive as possible but I have still made mistakes.

    The biggest mistake I made recently was trying to use contractors to rehab a property rather than simply doing it myself without a contractor. I thought I would be saving time and money by having contractors doing all the work, but in the end, I lost a ton of money because they took too long to do the work and seem to only know how to do what they have already done. Many contractors don’t know what they are doing, cannot grow to fit job-requirements, and I lost a lot income because I spent so much time dealing with the contractors’ stupidity, time and material wasting habits, and often poor work.

    The house I eventually got fixed up was about 50 years old and originally needed only some new windows, a few doors, some paint, tile, kitchen cabinets, counters, a new bath, appliances, light fixtures, and some other small items. Oh; and all new heat and A/C. I think it took me almost 6 months to get the work done using contractors – when I could have done it all myself in five or six weeks.

    What I Learned
    I learned a lot from fixing up that house. I learned how little actual talent and work ethic is behind most contractors’ talking their game. I am a contractor myself and cannot be BS’ed very easily because I have already done all of these sorts of repairs on houses and know exactly what it takes to do the jobs. I also learned that I should almost never use contractors for the work on a flip or rental property again – because my time is so much more valuable doing activities other than having to micromanage contractors. I also learned that, in addition to the fact that contractors will cost much more than doing the work myself; the time, trouble, and money of mine that they waste can never be re-gained., even by my best efforts.


    • Mark Ferguson

      I think my time is best spend finding the best contractors who do not have to be micromanaged. if I did all the work on my flips and rentals it would cut in one third the amount of properties I could buy and I would have no time for my real estate team, writing or my family.

      I think it may have been an experience that cost you more money than doing the work, but in the long run how far can you get doing everything yourself?

    • I did the same. Fortunately, I didn’t have a contract with him. I took one look at his crews dry walling and got rid of him. Thankfully, I only had to rehang a ceiling and a few walls and refit a leaky french door. Also, he’s one of those pushy guys who seem to take over without you realizing it. He wishes he had the money to flip so he has grand ideas for other peoples projects. I am angry about how generously he paid himself and his crew, though. Had I hired on my own I could have saved over 1/3 in labor cost. Lesson learned is never lose control of your own project and get a break down on money going out.

  4. Frankie Woods

    Mark, thank for sharing this story! I don’t think we as new investors get enough of the mistakes, and get too many of the success stories. I’m a huge fan of your no-nonesense style, and I look forward to hearing more! By the way, nice response to my real estate vs stocks comment 🙂 Happy holidays!

  5. margaret smith on

    I have made some doozies! The worst mistakes (that is a plural!) were my first deals, where I lent money to others or was the money partner and they were the work partner. I made the huge mistake to think that I could do the paperwork myself, without a good attorney to help with the contracts. Put that together with former “partners” who seemed so full of integrity when times were good and become total fraudsters when times got tough- and you have one recipe for disaster. ALWAYS do full due diligence on the people you work with, and be represented by a good real estate attorney, because if the paper isn’t right, it just doesn’t matter whether you use high end materials or do a good paint job… you have built your lovely house on the proverbial sand!

  6. cheryl c.

    I have a couple (perhaps more!) major mistakes. Failure to fully investigate new tenants (don’t ever feel sorry for a tenant because they will NEVER feel sorry for you); getting involved with relatives on RE investments; failure to conduct regular inspections; buying into the hype of the late ’80’s ( kept me out of buying after early 2003 – lesson learned!); keeping a contractor well after I should have “divorced” him (always get other bids and, also, drop him when he gets complacent and starts back – burnering you, cutting corners and jacking prices).

    I got into one flip just prior to 9/11 – really not my fault, but I did lose money on that one.

  7. Tommy Lorden

    My biggest mistake was buying land. It is as risky as you read, and unless your buying agricultural with a farmer who will rent it, there is just too much downside when you factor in the carrying costs on top of the uncertainty as to the actual future use and the costs associated with that. Sure you can hit it big if you got cheap dirt in the right place, but if you end up sitting on it, it is a major drag and just not worth it compared to alternatives like cash flowing units.

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