Why not a "Real Estate Failure Stories" forum??

22 Replies

Ok, so I can picture the raised eyebrows and perhaps even a curious look from @Joshua Dorkin right now... but please bear with me and read on.

This topic has been raised by other users here, and here and several other posts but only a few of them have many people willing to comment. Why is this?? Almost everyone here has bombed at some point - that's thousands of failure stories. Why does it seem so few of us want to share those with others here?

Backing up... I was talking with a fellow user this week over drinks about how wonderful BP is - the resources, the community.. Wow! hands down the best REI site on the Internet - undeniably! But I mentioned my discontent about the fact that there is an inordinate amount of success stories out there and not enough people posting about their "failures". BP boasts "learning about real estate without all the hype" but I've always felt like an information gap like this could be misinterpreted as just that... hype.

I don't blame BP for this. It's not like Josh has a team of people moderating posts and removing unfavorable content. Instead, I'm sure it's a simple fact that people are eager to boast about their accomplishments (and rightly so) but generally adverse to highlight their shortcomings. Not to mention... I wouldn't be motivated to spend time posting something that made me feel lousy as I rehashed all of the gory details - Yuk! Some (or most?) may even drop off the BP radar after that first bad deal or simply exit the REI industry altogether.

But, today after discussing this very thing, I found a post from @Scot Howat (1st time flip in chicago was a flop) about his very first flip experience. He walked us through the numbers and how it was going to cost him about 12k in the end. A good number of questions were asked as to what went wrong, and as a new investor, I learned some very valuable things. I noticed something interesting.. I didn't feel pumped up after reading Scot's post but I did feel more empowered. For me, getting pumped up from reading a post about someone making 25k off their flip is great but it's a little like a Red Bull sugar rush... it's great while it lasts, but in a little while, I need to find more to get back to that feeling again. Scot's post was more like a healthy dose of complex carbohydrates. He gave all of us the opportunity to learn from HIS mistakes, and that went a long way for me.

This is not to say that there isn't a representation on BP of the dirty realities of REI but the stuff I do see is usually a bit abstract... "Be careful of this, because of that". I don't find nearly as many real world, all cards on the table conversations like Scot's. 

The title of this post was meant to be a bit provocative. I don't necessarily think there needs to be a dedicated forum for failure stories (or should there be?). I'm more interested in hearing everyone's take on this. 

  • Are there enough postings on BP like this? Maybe I've just missed it. 
  • Do you think there is worth in encouraging more information sharing like this?
  • Do you think more postings like this could have a negative, demotivating or demoralizing effect on the community?
  • Do you communicate and detail your "failures" on BP? If so, what are your reasons. If not, why?
  • Other thoughts?

@Craig Leininger

It is no different than real life. How many networking events have you been to where people where more focused on their failures or risk? I have yet to find many. Esp. with all the focus now on brand building people I think are more conscious of this than ever if they do not have an existing brand. 

I do think ur right though hearing more about failure would be a great thing esp for new investors that think its all straight up. 

Thanks!  I agree (obviously).  I learned about 10x as much from the flop than I did from my other successful flip.  I wanted to post the true results of things because I want people to know what can (and DOES) happen.  

You can lose your shirt if you're not careful.  

I made a $2500 mistake because I didn't know how to tell if my service panel was up to code.  Now I can save $2500 on every house going forward which will pay dividends.  Hopefully everyone out there can save themselves from the same costly mistakes.

I think this is excellent. You learn way more from your failures than you do your successes. I would love to read failure stories because you may be getting ready to make the same mistakes then happen to read it on a forum and avoid those mistakes. You defiantly learn every time more from mistakes. I think adding this category would only make BP a stronger asset than it already is by assisting users to be able to several post about the 'do nots' of real estate. Great idea!!! 

@Charles Worth

Thanks for your input. Hopefully I didn't give the impression that the focus should be as much on failures as successes. Only that people should be more willing to swallow pride and share those experiences with others. It just seems so lopsided and there's SO much to learn from those stories. To your point though... there are more reasons than ego that people don't share more along those lines.

@Scot Howat - I know I already said it but thumbs up to you and thanks again!

Still interested in hearing everyone's opinion on the bullet points.. but mostly on this one:

Do you communicate and detail your "failures" on BP? If not, why?

Makes complete sense to me. Learn from other people's mistakes rather than your own. Much less expensive that way.

@Craig Leininger Maybe you haven't read enough threads? I have found on average that the posts are very balanced, cautionary when necessary, and VERY educational overall. Sure, posters may not give a blow by blow account of every failure, but they have shown a remarkable readiness to share what they learned from those mistakes. BP rules, OK?...

@Brent Coombs - Thanks for the feedback. Agreed on all points. I just wish more people detailed their failures like Scot did - I just don't see that alot as much as I would like. Maybe as @Charles Worth said, the value is really more for newer investors as opposed to established folks who have been there and done that.

@Craig Leininger , I agree - people learn more from failures than successes. In fact, every single week, I update BP Nation on what goes on in my real estate business. Here:

http://www.biggerpockets.com/forums/223/topics/183925-make-1m-in-12-months-real-life-of-a-real-estate-investor-year-2?page=6#p1368974

I feature both the GOOD and the BAD things that happen in my real estate business every week. I feature both successes and failures. It's embarrassing to share my mistakes (and even after investing for over 12 years, I still make mistakes every week!) but BPers tell me that they benefit a lot from me sharing my mistakes.

Also in my podcast - http://Biggerpockets.com/show65, I share the worst investment mistake I made in my real estate career. I lost a building to foreclosure but that propelled me to more success. 

But do we need a separate forum category entitled "Real Estate Failures"? Maybe not. The forum category - Real Estate Success Stories - is good enough. A "failure story" shared and learned from, is already success.

@Wendell De Guzman - My post was definitely focused on those that do not post these stories and not the many discussions/posts like yours. I debated if I should make my post any longer than it already was by expanding on that part. You are a GREAT example of what I would love to see from others on the site. Thanks for leading by example.

And... I agree 100% that we don't need another forum. The title was meant more to spark conversation.

Thanks for your feedback and contribution to the community!

i agree about a forum for mistakes, but that would be very specific based. for example, not including the cost of updating the panel might put you in the red. or not knowing that the hardwood is shot. or not catching the crack in the foundation during the inspection. or not even doing an inspection.

there are so many (hundreds) of reasons to make it a flop that it might not be beneficial to most people. it might even scare people away from ever trying to get into the business. not to say "jump in and lose you shirt", but i dont know how much it would help if there is a "flop forum".

multiple people on the podcasts have said "if you have not had a flop or being sued in this business, you have not been doing it long enough". so, everyone (except the TV shows) have had a flop, in my opinion.

To me, here are the keys to success:

- buy super low (as low as possible) to account for anything that jumps out. 

- watch Income property, property brothers, Flip or Flop and most importantly Mike Holmes to learn how to know if anything will need replacing. doing the work and watching the shows has taught me everything i need to know. I can spend less than 2 mins in the property and know everything that will have to be replaced

- have multiple exit strategies - it should make you money no matter which one you choose. Keeping it as a rental should be one of them

- always get quotes and give them budgets. dont ask "how much?". tell them, "My LABOR budget to replace this water heater is $150, can you do it?"

- learn how to do stuff yourself so whenever you can't get cheap labor, do it yourself. it's not that hard.

I think one reason many do not post their failures is that some (newbies) of use BP more for learning and a little networking, and others (expereinced investors) use BP for networking and a little bit of learning.

If I am an experienced investor and I want to build my business why would I come to the place I am using to build my network and where I market myself to voice my failures. That could make a potential lender say whoa wait a minute rookie mistake, I'll keep my money to myself.

@Joel W.

  good observation... the one area that I am certain were we don't hear enough of reality is in the world of the landlords  you can't have rental success 100% of the time... just not the real world...

So in my mind if you have people get pumped up reading BP or going to the numerous coaching companies that propel people to take action.. if they succeed they like to talk about it.. if they fail they just kind of sail off into the sunset never to be heard from again. Many if they fail right out of the gate have no desire to continue ( IE that did not work) and or lost money and can't continue no matter what they desire.

I am sure there are the rare case were an investor never lost any money.. Personally that's not me.. I have made millions and lost millions  especially in the GFC.. am I smarter today I hope so.. can I still have a bummer  YES.. but I think after 40 years of doing this I am a little better at it... I have two new builds in Oregon were I am going to break even or lose a few bucks.. The micro market got soft there was a bunch of rental homes owned by the last builder who had to hold in 09... and this spring they put them on the market causing downward pricing.. along with subs and materials creep up led to a break even scenario..

But I also have closed 4 this year in Charleston SC  ( new builds ) that have performed as projected... so on balance all is well !

Medium ksqoekox 400x400Jay Hinrichs, TurnKey-Reviews.com | Podcast Guest on Show #222

@Craig Leininger - Some people might wonder if you have a penchant for failures and want to see this community's posts tilted as such.

Yes, we all make mistakes and hopefully learn from them. As such, some people are comfortable with their exposure of failures and others are not.

As you know, this community is vibrant, knowledgeable, helpful and above all wants to see everyone propelled to excellence and success.

The community therefore, does not want to harp on failures, but, willing to dissect them and offer advice.

My theory is that success and failure are like driving a car. If you continue to look in the rear view mirror while driving, you will  definitely crash. So, keep your eyes on the road to success and look forward.

Medium stml logoLinval T., STML Housing Solutions, LLC | [email protected] | 678‑922‑2477 | http://www.stmlhousing.com | NY Agent # 40TA0997583

I like the idea of a failure category or at least changing the name from "Real Estate Success Stories" to "Real Estate Success and/or Failure Stories". It could also be called "My Experience in Real Estate". That is why I come here - to see what people are actually doing and specifically how it worked out for them. There are plenty of other places to get the fluff.

Paul Choate JD | 405‑426‑9677

@George P. - Great suggestions, esp the tell don't ask when it comes to GC quotes.

@Linval T. - Thanks very much for your input. "Some people might wonder if you have a penchant for failures and want to see this community's posts tilted as such." - I would suggest that those folks perhaps didn't read my post completely or simply misinterpreted it. "The community therefore, does not want to harp on failures, but, willing to dissect them and offer advice." - You nailed it! I'm only suggesting that I personally would like to see more factual dissection.

I'm curious about your personal opinion on a post like Scot's in relation to your theory. 

Originally posted by @Joel W. :

I think one reason many do not post their failures is that some (newbies) of use BP more for learning and a little networking, and others (experienced investors) use BP for networking and a little bit of learning.

If I am an experienced investor and I want to build my business why would I come to the place I am using to build my network and where I market myself to voice my failures. That could make a potential lender say whoa wait a minute rookie mistake, I'll keep my money to myself.

Very well said on that first point. On your second, I would have to agree. However for me, If having to choose between someone who simply exhibits talent and a person who adds to that authenticity and transparency, I would pick the latter.

@Scot Howat - Exposure of his experience is good therapy for him, and that's ok.

But, as @Steve Smith said "Takes a lot of courage to post that you lost"

So, as I have said before some people are comfortable about airing their failures and others are not.

Our discourse will end at infinity without any wrong or right affirmation.

I look forward to reading and/or commenting on your future posts.

Medium stml logoLinval T., STML Housing Solutions, LLC | [email protected] | 678‑922‑2477 | http://www.stmlhousing.com | NY Agent # 40TA0997583

Good suggestion, Craig.

Real estate investing seems to be littered with charlatans who try to entice newbies to buy their books, consulting, services. This is why I refuse to join my local REIA. It makes me puke every time I have attended.

I've failed and I don't mind sharing.  I'm sure there are others here who'd do the same.

I'm tallying up the numbers still on a major hit I'm taking after an eviction. I planned to post it as soon as I have all the details. I agree sharing failures is as good as success. It shows the reality of RE and yes, much is learned from others failures.

@Stone Teran - Thanks. That's a shame about your REIA. That would turn me off as well. It's unfortunate given the networking opportunities they provide.

@Bryan H. -  I don't do buy and hold but I look forward to reading about your experience... and I know others will benefit from it. Thanks for participating in the conversation.

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