First Deal Flopped...Now What?

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First Deal Flopped...Now What?

Renee Yarbrough
Investor · Chattanooga, TN · Member since 2019 · 137 posts · 122 votes

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.

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Brant Richardson
Investor · Santa Barbara, CA · Member since 2013 · 658 posts · 315 votes
7y

 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.  

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  • Marcello I.
    Rental Property Investor · Long Island, NY · Member since 2019 · 20 posts · 13 votes
    7y

    Although my situation is a little different, I’ve had 3 offers fall through so far. A seller came back a month and a half later and asked if I was still interested at my previous offer price. It turned out that I was no longer interested, not because it wasn’t an ok deal, but because the neighborhood would have been the worst move for me (think nicest house in a C/D class neighborhood).

    At the end of the day I’m really glad my initial offer fell through, because it gave me more time to do more research on the neighborhood and figure out that it would have been a bad situation for me. My main point is, that it wasn’t meant to be and hard work pays, even if the outcome wasn’t what you were initially shooting for.

    0Reply
  • Renee Yarbrough
    OP
    Investor · Chattanooga, TN · Member since 2019 · 137 posts · 122 votes
    7y

    @Luis Baumeier

    This video is fantastic!!! I'm watching it again and again because the mindset is perfect.

    Thank you for taking the time to share it with me.

    1Reply
  • Renee Yarbrough
    OP
    Investor · Chattanooga, TN · Member since 2019 · 137 posts · 122 votes
    7y

    @Alexander Ball

    Oh wow...that sounds daunting. Several people on this post are saying the problems might be different, but you get more proficient at solving the problems. It sounds like that is true with you.

    I will say that I like the person who I've become through this process. And I've REALLY enjoyed the journey! I think I will like this new job.

    0Reply
  • Renee Yarbrough
    OP
    Investor · Chattanooga, TN · Member since 2019 · 137 posts · 122 votes
    7y

    @Thomas Hundtoft

    Thank you for all the great advice! My next step is to learn about different types of financing. I will also get Brandon's book.

    Great wisdom...I appreciate you taking the time to respond.

    PS. Even though I know in my head it is the seller's responsibility to pay vendors for work done before closing, my heart feels bad for them.

    0Reply
  • Renee Yarbrough
    OP
    Investor · Chattanooga, TN · Member since 2019 · 137 posts · 122 votes
    7y

    @Ola Dantis

    'Rite of Passage' I like that, Ola! It's a good way to look at this situation.

    And thank you for the encouragement. I was so nervous to post on BP, as I read the forums all the time, and people are so darn smart!

    But what a bonus it has been to have this valuable feedback. Great advice, lots of detailed suggestions, and many stories that help me know this is part of the process.

    0Reply
  • Renee Yarbrough
    OP
    Investor · Chattanooga, TN · Member since 2019 · 137 posts · 122 votes
    7y

    @Kian Atkinson

    Thanks for the encouragement. It was tough to post all my mistakes, but time and again I've read posts from others who needed help, and this community really swoops in to help. I hoped that would happen to me, and MAN, I have not been disappointed!

    Good advice...this weekend I'm spending a lot of time in reflection, getting notes on paper, and studying where I could change for the future.

    Your suggestions will become a template for my homework.

    1Reply
  • Rob Milliken
    Wholesaler · Union, ME · Member since 2016 · 148 posts · 27 votes
    7y

    @Renee Yarbrough

    What you do is, pick yourself up, dust yourself off, call it growing pains.

    Where do you go wrong?

    What was the cause of the mistake?

    Often times investors make mistakes. We learn from them and keep going. You are not a failure, it was mistakes.

    Have faith in yourself.

    Keep in mind,

    The difference in someone making it in this business and not, is how many times you pick yourself back up. A successful investor got up one more time than the one who is not going to make it

    0Reply
  • Craig Clark
    Rental Property Investor · Lewisville, TX · Member since 2018 · 66 posts · 16 votes
    7y

    @Renee Yarbrough Like you, I am still learning as well and I don't have a ton of experience with REI but like everyone who does anything that they are good at, you only get great by persevering through the times that you find hard, not giving up, and learning from the bad experiences as well as your good ones. I would encourage you not to stop and take a second to think about some of the worst moments you have experienced in life and remember how it passed and how it made you stronger.  My overall point is, not many of the great men and women of our species ever get the extraordinary right their first time, second, or even their third; but what they get right each time IS NOT GIVING UP.   

    So I am just going to list a few quotes that have been thrown around on the podcasts and several books that I keep embedded on my mind for motivation: 


    "Don't let FEAR take over" - its just (False Evidence Appearing Real)

    "Remember to FEEL and repeat - (Focus. Educate, Execute, Learn) - you stayed focused, educated yourself, executed a plan and now you are learning from it.  Take what you have learned and start over with better focus and a better education 

    "This to shall pass" - just like the good times, the bad times will pass

    I hope this can be of some help and good luck. 

    0Reply
  • Robert Pfenninger
    Real Estate Investor · Waco, TX · Member since 2017 · 85 posts · 39 votes
    7y

    @Renee Yarbrough many people have been in your shoes. Difference between the ones who are successful now and the ones who aren’t? The ones who are successful learned from their mistakes and tried again! Always remember the worst case scenario, if you can live with that then nothing should stop you!

    0Reply
  • Michael Ablan
    Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    @Renee Yarbrough -  Just accept that it happens.  It happens to newbies and pros all the same.  The key is to take the time to dissect the event and figure out what went wrong and what you must do to ensure it never happens again.  The difference between winners and losers is losers make the same mistakes repeatedly and then give up.  Winners make the mistakes, but learn how to avoid replicating them and keep on pushing forward.  You got this.

    0Reply
  • Lam N.
    Rental Property Investor · Troy · Member since 2017 · 175 posts · 271 votes
    7y
    6Originally posted by @Renee Yarbrough:

    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.

     Here are some rules my husband and I use for ourselves.  

    (1) NO ONE IS AS CAREFUL WITH MONEY AS YOU ARE.

    In other words, don't just hand over your bank account to a financial advisor and expect great returns.  You gotta be on top of your own business.

    (2) Nothing is better than experience.  

    You can listen to all the podcasts and read all the forum advice out there.  In the end, you gotta get your feet wet.  That's how you learn for real.

    (3) Biggerpockets is great, but developing your own strategy that works for you is better.

    We developed our own strategy that isn't in line with many people here at biggerpockets and our worst performing rental property has a net ROI of 32%. By net, I mean we only use 60% of the total.

    (4) Always be wary of people approaching you with big promises.

    We have found that once they know you have money and are in the market to invest, the conmen and dredges of society will gravitate toward you looking to con you out of your money.  You fight this by being on top of your business instead of relying on other people.  

    (5) A flop is not the end of the world.

    Don't keep crying over past failure.  Deal with the failure head-on and move on from there.  Learn from it.  

    (6) Have I mentioned NO ONE IS AS CAREFUL WITH YOUR MONEY AS YOU?

    2Reply
  • Mark Brogan
    Investor · Roanoke, VA · Member since 2012 · 1k+ posts · 374 votes
    7y

    @Renee Yarbrough

    There are people in this business who have lost lots of time and money, get past it and on to the next deal, time to get to work

    Good luck

    0Reply
  • Alissa Engel
    Great Falls, MT · Member since 2017 · 97 posts · 172 votes
    7y

    @Renee Yarbrough

    Hi Renee! First, I’m proud that you are my Aunt! Secondly, I’m sorry the deal didn’t go through, but you are learning.

    Lending will always be one of the most stressful parts. As you know, my mom was a lender, and she always said that SOMETHING will go wrong on every deal. The key is to find a lender that anticipates the problems early, and offers creative solutions. I stopped working with her bank several years ago, because their rules were too stringent. They couldn’t (or wouldn’t) get creative. Eventually, the hassle of her underwriters out-weighed the luxury of knowing that my mom wouldn’t over-charge me.

    We moved to a lender who is at a private company with more flexibility, but I spend a lot of time double-checking rates and fees to make sure we aren’t being over-charged. He believes in us, but he has a tendency to blow smoke and say all the right things to get our business.

    For example, we just finished a 1031 that came dangerously close to falling through as a result of lending. We got pre-approved for an amount, found two properties via direct mail, made offers that were within our pre-approval amount, had offers accepted, went through all inspections.....then two weeks out from closing he lets us know that we are NOT okay for the loan! He apparently wasn’t listening when I said I was only part-time in the National Guard. He’d entered full-time military pay to get the pre-approval! Thankfully, I was just leaving for a deployment where I would be getting full-time pay for the duration. He managed to squeak out the deal by pennies. I was livid. It was stressful.

    It’s a fine line between someone who will think outside-the-box, and someone who’s full of it. Someone’s empty promises and inattention to details can just as easily cause a deal to fall through. It pays to have “your guy” that knows you and your finances, and always get pre-approval BUT things can and will (almost always) go wrong on the lending side.

    I hope you enjoyed the chocolate....and I can’t wait to hear about your next deal! I know you will get back up tomorrow and try again.

    2Reply
  • Nicho Pruett
    Investor · Upper Marlboro, MD · Member since 2015 · 43 posts · 35 votes
    7y

    @Spencer Cornelia @Spencer Cornelia

    Wow. That statement is huge. You just open my eyes to a new outlook on life in general not just realestate. Thank you I needed this today.

    The quality of a person’s life is representative of the quality of the problems they are solving.

    2Reply
  • Renee Yarbrough
    OP
    Investor · Chattanooga, TN · Member since 2019 · 137 posts · 122 votes
    7y

    @Alissa Engel

    So great to get your comments. Having your mom as a lender gives you a lot of wisdom, knowing both sides of the story. I'm proud of you, Alissa...you've worked hard and learned a lot. I'm honored to learn from you.

    There have been several comments on this thread about the lending side of REI, which tells me it's time to dig in and learn about financing.

    Love walking this path alongside you!

    0Reply
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    7y
    Sometimes you win, and sometimes you learn.
    Irish Jones Realty4.947 Reviews
    View Page
    0Reply
  • Judy Parker
    Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes
    7y

    @Renee Yarbrough

    Hang in there.  We have ALL made mistakes in this business.  It's a learning curve.  You now know that you will never make that mistake again.  Hang in there and keep moving forward.  And, of course, you are welcome to ask questions here on Bigger Pockets, to get advice and guidance to prevent making another mistake.  Have a great day!

    0Reply
  • Justin Rank
    Investor · Winhall, VT · Member since 2016 · 106 posts · 44 votes
    7y

    Learn from it and turn the page...sounds like the only thing lost here was time. 

    0Reply
  • Michael Gansberg
    Investor · New York City, NY · Member since 2015 · 388 posts · 563 votes
    7y

    @Renee Yarbrough - move on to your next deal without a second thought. If there's something to be learned about why your prior deal fell apart, learn it and use that knowledge to prevent a recurrence. Beyond that, be careful not to jump on the next thing that comes along without proper due diligence. I've made that mistake- don't lose your patience on your next deal because of the recent bad outcome. Apply your benchmarks with the same stringency you used for your last deal.

    MG

    0Reply
  • Randy Bloch
    Rental Property Investor · Minneapolis · Member since 2019 · 257 posts · 244 votes
    7y

    @Spencer Cornelia

    Who said this? Was looking for this quote?

    0Reply
  • Sam Shueh
    Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    7y

    Learn from your mistakes. After some experience you know what you want, whom you wish to deal with, what price you need to offer, and when to get into a contract. My time is worth more than haggling and annoyance. When an opportunity comes along I am willing to pay more than others to get it done. 

    0Reply
  • Isaac Johnson
    Rental Property Investor · Sioux Falls, SD · Member since 2019 · 129 posts · 138 votes
    7y

    @Renee Yarbrough how to be successful:

    -make the right decisions

    -how do you make the right decisions?

    -experience

    -how do you get experience?

    -make wrong decisions

    1Reply
  • Renee Yarbrough
    OP
    Investor · Chattanooga, TN · Member since 2019 · 137 posts · 122 votes
    7y

    @Jacob Sampson

    Good words.

    I especially like "In the beginning stages you are going to make the most mistakes so try to ensure they are small...worst case scenario, I could manage the mortgage payment on my own without a tenant."

    0Reply
  • Ken B.Pro Member
    yucca valley, CA · Member since 2015 · 77 posts · 33 votes
    7y

    @Renee Yarbrough,

       Congrats you took action and few do. Your learning and getting better at it. Keep at it and keep taking notes good and bad. Remember the very best failed in the beginning to and look where they are today ( Brandon, David, and on and on). 

    0Reply
  • Renee Yarbrough
    OP
    Investor · Chattanooga, TN · Member since 2019 · 137 posts · 122 votes
    7y

    @Jay Hinrichs

    The thread is teaching me quite a bit, thankfully. Financing and a systems checklist seem to be the gaps in my knowledge and process.

    I'm so grateful for pros like you taking the time to encourage and teach. Thank you!

    0Reply
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