Have invested time in Bigger Pockets for a year: reading, podcasts, analyzing, drive-arounds, learning, learning, learning. Thought my first deal was done, only to have it fall apart in the eleventh hour.
So many of you pros talk about hard times...but man, it is tough! And difficult to face up to my rookie mistakes that broke this deal.
I'm not asking for sympathy...but do want advice that will get my face out of this bag of chocolate and put my boots back on the ground so I can find my lost grit.
You can only learn so much reading and now you are learning while taking action. That's real progress.
You learned a whole bunch making rookie mistakes and it didn't cost an arm and a leg. Sometime those rookie mistakes are measured in 10's of 1000's of dollars.
Accept rejection and keep making offers that will work for you.
Good words! You're right, all I lost was time and a bit of money. Gained a lot of knowledge and understanding about REI.
And you're right about learning from books vs. learning from experience. Thanks for the great reminders...it helps.
Keep your head held high. Rejection is part of the process. Not every offer gets accepted. It just means you will be stronger for the next one.
@Renee Yarbrough I highly recommend taking it as a learning experience. Specifically analyze what went wrong and use it on your next deal. I'm currently in the process of my first BRRRR, I've made quite a few mistakes but I'm so excited to use that knowledge the next time I pull the trigger. You don't learn anything when things go right, but now you have some stuff to help guide you in your next venture. You got this!
@Renee Yarbrough Eat the chocolate, go to bed and remember tomorrow is a new day full of possibilities. Take what you learned from this deal and move forward.
I wish it was just a rejected offer! My inexperience led a seller down the garden path for six weeks before the deal fell apart. That's the part I dislike most about this particular situation, messing up the other people who were involved.
Your advice to analyze specifically what went wrong is helpful. I will spend time this weekend with that homework. Thanks!
Ha! I did eat the whole bag...thanks for the encouragement. I was hesitant to write such a blubbery post, but now I'm glad I did.
@Renee Yarbrough It truly has helped me a ton, not just in REI but in life in general. For my first project I wasn't fully educated on how to use HM, went over budget on my rehab (hoping to still be good on my refi), and it took way longer than expected to rehab. All in all I'm really happy that I did it though because while I made mistakes I learned a ton that will enable me later on. If you don't mind me asking could you share what actually happened that made it not work?
@Renee Yarbrough were you trying to wholesale this property?
I don't mind sharing...especially if it will bring advice or help others who might be starting out.
1. Didn't make sure of loan eligibility before putting an offer on the house, then spent weeks scrambling (and asking everyone involved to scramble) to get DTI ratio in line for approval.
2. Applied for a FHA loan on an old, worn house which cost the seller thousands in inspector-required repairs, all while I was still fighting to be approved.
3. Vendors who did repairs agreed to be paid at closing...this one really bothers me, as I don't know when they will be paid.
4. In the end, I couldn't get approved because of my DTI ratio, a mistake that could have been avoided by taking time at the front end to get a solid pre-approval.
No, this wasn't a wholesale deal.
It was something in your control, @Renee Yarbrough - what a great learning experience knowing this on your next deal!!
Maybe create a check list next time with all the steps of the process that you will need to complete to execute your goal? I heard an investor mention this on one of the BP podcast (I forgot her name), but it sounded like a great idea to make sure the i's are dotted and t's are crossed.
Oooohhh...I would love to see that checklist. If you remember who the podcaster was, would you message me?
Good words, Calvin. I really appreciate your advice.
It is Bigger Pockets podcast, episode #340. Her name is Whitney Hutten. She is sharp!
It this business was easy everyone would be a rich investor. Never give up
@Renee Yarbrough I truly think that one can only learn when they have something to lose and/or have something at risk.
In the moment, learning experiences suck. I'm going through that now. Over the past 4 months, I've lost probably $40k-$60k of equity in properties because of two unfortunate breaks. And this is my first year in the game so I'm not in position to eat this drop without feeling it. But I can tell you that I'm in a significantly better position today than I was 12 months ago.
Spend enough time on these corners of the web and you'll think you aren't $H1T unless you have 100 units in your first 5 years. But keep in mind that most people who sign up for BP won't get past 3 or 4 units. Why??
Because this game is really hard...
You made a mistake. You paid for a learning lesson. But I bet you won't make that same mistake again. Maybe this will open up your eyes to creative financing and how (maybe?) you could have applied it in this scenario so that you won't have to deal with traditional lending again.
Someone very wise once said that the quality of a person's life is represented by the quality of the problems they are solving...
Persevere through the difficult beginner's stage and the problems you'll be solving will be much better than this one :)
Ride the bike. You made some mistakes, you learnt. That is the most important thing. Keep going.
Thanks for sharing the hard times, we've just settled on our 4th deal and it's a super hard process, hopes high for certain properties, disappointment when you view the holes with your own eyes (Estate Agents = Good Marketeers), uncertainty that is this the right thing to move on, the list goes on. It's all part of the game and one we are all learning as our toes go in to the water.
It's hard, but if it was easy, it wouldn't be fine, worth the rewards and everyone would be doing it.
Brush yourself off, eat the chocolate and crack on :-)
Thanks for the podcast info. Will listen today.
Yes..."Nevah, nevah, nevah give up." Winston Churchill
Ouch! I'm so sorry for the issues you are having.
Yes, I will know better next time, and learning in life is much different than reading about it in books.
Next class...Creative Financing 101.
Congrats. You are getting in the game. Learn from mistakes.
Remember that Robert kiyosaki says fail early where it’s less costly and learn.
@Renee Yarbrough Don't worry, we've all been there! The thing is, it never really goes away. You obviously won't make this mistake again, but there's always some sort of problem no matter what. I'm under contract for a few duplexes right now and I told my bank ahead of time all the details. They came back to me Monday and said they want a different contract (it's an off market deal). Seriously? You're telling me this now when I told you exactly what I was doing? Why not give me the exact template for the contract you would need. They haven't responded to any of my message this entire week and now I'm scrambling to find a new mortgage broker because I have no idea what is going on. It definitely gets easier, but it really is a never ending learning experience.
@Renee Yarbrough the seller is taking on risk when the repairs are needed. I'm not sure you are responsible because you are the customer/buyer. The FHA 203K loan program is available for making repairs after the closing. Of course it will need to be your primary residence for 1 year (Think house hack). The vendors should be paid by the seller if the repairs were made prior to the sale. They will lien the house if they are not paid. My advice is to line up financing as you are shopping for deals. Also listen to the audio book on "no or low money down" by Brandon Turner (although affiliated with BP, it does have a lot of good information).
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