First deal/offer fails- what did you learn?
Hi All!
I saw the post on renovation fails- and it inspired me to share my story on how not successful my first "deal"/offer back in January, with hopes it may help others.
A few small things I learned in case it helps anyone just starting out- but would LOVE to hear any lessons you learned from buying/renting real estate.
I was happy as can be when my offer was accepted on a "great investment property" in Philadelphia. I was thrilled for much of January, trying to take all the advice from bigger pockets and making it work for me- but then started running into problem...after problem...after problem.
It's all 20/20 in hindsight, and I would have handled things differently now, but there was SO much I learned from it.
1. Don't do business with people who are dishonest. It seems so obvious- but when it was actually happening, I kept rationalizing. At first I let it go that the sellers had misrepresented the rents on a signed disclosure, but as we uncovered more information during due diligence almost everything they had told me about the tenants was a lie- I SHOULD have ended the deal then.
2. Get ABSOLUTELY EVERYTHING IN WRITING- every single change to the addendum, and make sure it is signed and counter-signed before you consider it checked off your to do list
3. Talk to the tenants! It was really awkward during inspection, and the downstairs tenant was obviously unhappy, If I had known earlier that she had no intention of leaving I may have been able to handle it differently, gotten out of the deal sooner, or offered cash for keys. I was uncomfortable and rather than just step out of my comfort zone and use the opportunity, I let it pass and paid for it.
4. Be aware of the financials-always- and understand they can change. First it was just some flooring and walls, then it was electric and windows, then radon...then U&O certification...at a certain point the margins on this deal were just not at a point where it made sense.
I moved on, and found two new places in the subsequent months but wanted to share this experience in case it helps anyone, even in the smallest way!