{"id":161102,"date":"2023-10-25T14:38:13","date_gmt":"2023-10-25T20:38:13","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=161102"},"modified":"2023-10-25T14:38:21","modified_gmt":"2023-10-25T20:38:21","slug":"three-investors-and-their-biggest-failures-and-what-it-taught-them","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/three-investors-and-their-biggest-failures-and-what-it-taught-them","title":{"rendered":"These Investors Failed at Investing Plenty of Times\u2014Here&#8217;s What They Learned"},"content":{"rendered":"\n<p><span data-preserver-spaces=\"true\">The saying goes, \u201cOnly those who dare to fail greatly can ever achieve greatly.\u201d Sometimes, it\u2019s really those mistakes that teach us the most.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">We talked to three investors about their biggest mistakes and what they learned from making them.&nbsp;<\/span><\/p>\n\n\n\n\n\n\n  <div class=\"lg:block\" x-data=\"{ ad_block_block_65397c6ad7954: popAds(1) }\">\n      <template x-for=\"ad in ad_block_block_65397c6ad7954\">\n        <a\n          :href=\"ad.linkURL\"\n          class=\"no-underline text-black\"\n          x-on:click=\"adClicked('https:\/\/www.biggerpockets.com\/blog\/three-investors-and-their-biggest-failures-and-what-it-taught-them', ad.sponsor, ad.title, ad.id, 'blockAdClicked', 'blockAd', '')\"\n          target=\"_blank\">\n          <div\n            class=\"py-4 border-b flex flex-col flex-nowrap text-sm border-t px-0 rounded-none\"\n            x-init=\"\n              analytics.track('blockAdLoaded', {\n                referrer: 'https:\/\/www.biggerpockets.com\/blog\/three-investors-and-their-biggest-failures-and-what-it-taught-them',\n                sponsor: ad.sponsor,\n                ad_title: ad.title,\n                ad_page_location: ''\n              })\n            \"\n            x-intersect:enter.once=\"adViewed('https:\/\/www.biggerpockets.com\/blog\/three-investors-and-their-biggest-failures-and-what-it-taught-them', ad.sponsor, ad.title, ad.id, 'blockAdViewed', 'blockAd', '')\">\n            <div><span class=\"text-xs text-slate-light block bg-slate-50 p-1 inline-block rounded-md\">Sponsored<\/span><\/div>\n            <div class=\"flex items-center text-sm space-x-4\">\n                <img :src=\"ad.imageURL\" :alt=\"ad.imageAlt\" class=\"h-10 w-10 object-cover rounded-full\">\n\n                <div clas=\"text-sm\">\n                    <span class=\"font-bold block\" x-text=\"ad.sponsor\"><\/span>\n                    <span class=\"text-slate\/80\" x-text=\"ad.description\"><\/span>\n                <\/div>\n            <\/div>\n\n            <div>\n                <span class=\"font-bold\" x-text=\"ad.title\"><\/span>\n                <p class=\"mt-2 text-slate\/80\" x-text=\"ad.body\"><\/p>\n                <span class=\"mt-2 text-themeBlue block mt-2 underline\" x-text=\"ad.linkTitle\"><\/span>\n            <\/div>\n          <\/div>\n        <\/a>\n      <\/template>\n  <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Considering Renovation Costs is Key<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Ali and Josh Lupo are full-time real estate investors (on Instagram as&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.instagram.com\/theficouple\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">theficouple<\/span><\/a><span data-preserver-spaces=\"true\">) who invest in the Albany, New York, area.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The big mistake<\/span><\/h3>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">Woefully underestimating&nbsp;<\/span><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/rookie-330\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">renovation<\/span><\/em><\/a><em><span data-preserver-spaces=\"true\">&nbsp;costs and failing to have someone with more experience walk a property with us. On our second house hack, we rushed the&nbsp;<\/span><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/building-permit-inspection-process\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">inspection<\/span><\/em><\/a><em><span data-preserver-spaces=\"true\">&nbsp;and underestimated the repairs by more than $20,000. We ended up needing new windows, new HVAC, new flooring, and a new kitchen. Many of these expenses could have been negotiated during&nbsp;<\/span><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/who-pays-closing-costs\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">closing<\/span><\/em><\/a><em><span data-preserver-spaces=\"true\">&nbsp;if we had taken the time to consult a professional.<\/span><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What it taught us<\/span><\/h3>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">Now, whenever we tour a property, we have a&nbsp;<\/span><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/when-to-use-general-contractors-as-a-real-estate-investor\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">general contractor<\/span><\/em><\/a><em><span data-preserver-spaces=\"true\">&nbsp;with 20-plus years of experience tour with us. This costs us $200 to $250 for their time; however, it helps us better identify large repair bills [in advance] that we can use to negotiate with the seller for credits or [decide to] simply walk away.<\/span><\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Investing is a Business\u2014Be Organized and Prepared<\/span><\/h2>\n\n\n\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.instagram.com\/midshift_investor\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Katie Newman<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;is an ER nurse turned investor. She has a single-family home rental in Chattanooga, Tennessee, and a medium-term rental in Alexandria, Virginia.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The big mistake<\/span><\/h3>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">Being a beginner and never having owned a business before (I&#8217;ve worked in healthcare for over 15 years), the biggest mistake I think I&#8217;ve made so far is not taking my real estate investing seriously and not treating it like a business from the beginning.&nbsp;<\/span><\/em><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">I have a&nbsp;<\/span><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/how-to-find-a-property-manager\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">property manager<\/span><\/em><\/a><em><span data-preserver-spaces=\"true\">&nbsp;that manages my long-term rental in Tennessee, but with both my medium-term rental and my long-term rental, I had absolutely nothing set up&nbsp;<\/span><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/how-to-build-systems-in-your-real-estate-business\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">business-wise<\/span><\/em><\/a><em><span data-preserver-spaces=\"true\">&nbsp;to protect myself when I started investing. This ranged from having no business bank account to separate my income from personal income, no separate email or phone numbers aside from my personal accounts, no CPA or help when I had to file taxes, no clue how to even&nbsp;<\/span><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/what-to-include-in-a-lease-agreement\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">create leases<\/span><\/em><\/a><em><span data-preserver-spaces=\"true\">&nbsp;or get tenants to pay deposits\/rent, etc.&nbsp;<\/span><\/em><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">I wouldn&#8217;t say this is a huge fail or anything where I lost tons of money, but man, I think I could have avoided a lot of headaches and time with different rental incomes, tenant leads, tenant contacts, etc. if I had been a little bit more set up at the beginning versus winging the whole thing.<\/span><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What it taught me<\/span><\/h3>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">I obviously had to&nbsp;<\/span><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/rookie-332\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">figure things out on the fly<\/span><\/em><\/a><em><span data-preserver-spaces=\"true\">&nbsp;(for example, I had to call three friends after I had a tenant want to rent my medium-term rental property because I didn&#8217;t even know what to do to get a tenant to sign a lease, let alone background check them or get them to pay a deposit). Since then, I&#8217;ve created better systems for communication with tenants by establishing &#8216;business hours&#8217; for contact[ing me], changing email and my number for tenants to contact me, and creating better systems\/SOPs for contact with my tenants\/property manager, so it&#8217;s much more organized.&nbsp;<\/span><\/em><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">I&#8217;ve definitely learned from my mistakes, and since having my properties, I&#8217;ve set myself up better to function as a business owner versus someone that just has a couple of properties. I have better accounting and bookkeeping for my expenses and taxes, better communication for potential tenants and current tenants that don&#8217;t involve personal numbers, and other basic business frameworks for the future.&nbsp;&nbsp;<\/span><\/em><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">The biggest lesson I learned from this small but really annoying mistake is that if you learn to establish and treat your rentals as a business from the beginning, your ducks will be more in a row for when I intend to&nbsp;<\/span><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/rookie-262\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">scale my portfolio<\/span><\/em><\/a><em><span data-preserver-spaces=\"true\">&nbsp;down the line.&nbsp;<\/span><\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Listen to Your Property Inspector<\/span><\/h2>\n\n\n\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.instagram.com\/blackrealestatedialogue\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Sam Dolcin\u00e9<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;is an investor and podcast host (<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.blackrealestatedialogue.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Black Real Estate Dialogue<\/span><\/a><span data-preserver-spaces=\"true\">) who invests in the Dayton, Ohio, area.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The big mistake<\/span><\/h3>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">When I had the inspection for my first property done, I read it thoroughly (at least I thought I did) and provided a long list of things that I wanted repaired. Many of those things ended up getting repaired.&nbsp;<\/span><\/em><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">Two years later, when a new tenant moved in, the HVAC system went out completely and was beyond repair. The first thing I did was look back at the inspection report and [saw that] my inspector flagged that the HVAC system was near the end of its useful life and maybe had a few years left. I wish I paid attention to it and asked them to repair the system. Maybe it was a rookie mistake or [me] just being nervous to inquire about something like that.&nbsp;<\/span><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What it taught me<\/span><\/h3>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">In the end, I ended up getting fans for the tenants, since it was almost fall, and then using their rent payments to replace the HVAC system in the spring for $2,000. I was not excited to have to pay for this, but it\u2019s the cost of a mistake.&nbsp;<\/span><\/em><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">The next property I purchased, I was meticulous about the status of big-ticket items like the HVAC system. I communicated with my inspector after the inspection to discuss various parts of the report to make sure I understood what I was getting into.&nbsp;<\/span><\/em><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">Nobody is perfect, even the most experienced investor. You will make mistakes, and sometimes the same mistakes. Don\u2019t give up, and make sure you learn from your mistakes. Strive to do a little better every time.\u00a0<\/span><\/em><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_44737e6828d46c33386fa0e36af264bc\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_a21bbcd91a53655b27ac586ba22d0547\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_fa9ca4fef585b0a0be598a7bfb128890 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/three-investors-and-their-biggest-failures-and-what-it-taught-them&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/three-investors-and-their-biggest-failures-and-what-it-taught-them&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>We interviewed three investors and what their biggest failures taught them. Here&#8217;s what they said.<\/p>\n","protected":false},"author":613680,"featured_media":161105,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7358],"tags":[],"class_list":["post-161102","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing-stories"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/161102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613680"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=161102"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/161102\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/161105"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=161102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=161102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=161102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}