Investor · San Jose, CA, Bellevue, WA · Member since 2016 · 327 posts · 257 votes
Hindsight is always 20/20 right?
What's the biggest mistake you've made?
Mine would be....
Early on I didn't understand the power of BRRRR or buy and hold; I thought flipping and quick cash was the way to wealth. My biggest mistake was selling my very first property. It was a 2br 2.25ba (1 full, 1 three quarter, and 1 half bath) townhouse in a great HOA in a great area (Kirkland, WA) that I purchased it at the bottom (2012) for $127k. Put $20k into rehab and resold for $267k. At the time I thought it was the best thing that had ever happened to me, until I recently looked at what those units are selling or now.... they're in the $430k range. In hindsight I would have kept it as a strong cash flowing rental.
@Christian Wathne I don't get it, why would you have made money if you held to it until now? At 430k, and still holding, you haven't made $#!+ yet. At 147 plus selling cost, you've made 90k easy. If every deal you make 90k, every 6 months or even at 3 every 2 years, that's 270k every two years, it's now 2017, so at least you've made 540, why do you think the 160k for 5 years is any comparable to flips? In 2012, you made 90k, and if you did not sell, even if you sold and made money today, it would be only roughly 120-125k back in face value in 2012.
Took too long to get started always saying I needed more. I didn't take the risk of having to shore out $1k on a small repair expense because it wasn't in savings so therefore I didn't want to buy, but I was OK paying that amount to my landlord every month...WTH was I thinking!
Biggest mistake was not buying a couple of condos in a prime location in San Diego that were around ~$130k (2/2 units) and now going for $300k+ not even 4 years later. Reason I didn't buy? Over-thinking. It was an older apartment complex of dubious quality converted into condos and the buildings weren't in the greatest condition... the reserves were also thin and I didn't wanna get hit with assessments. Still, could've picked up a couple of those easily. Too conservative, should've went balls out during that bottom. Oh and missing the larger trend on shadow inventory versus banks and hedge funds.
I am a hindsight billionair 10 times over .. You cant predict the future
I respectfully disagree. That's one of the tasks of an investor is to do exactly that, and do it well... seek to predict of future of markets in order to generate strong returns. And it's why all investors should extensively research markets, trends, and fundamentals that are likely to drive price appreciation.
Sometimes I feel my biggest mistake was not being interested in it sooner.
But, then I think "Well, I never had money all those years ago! So, it wouldn't have mattered" OR "well, at least I didn't go bust as I just would have recovered now." (And, I can't imagine I'd be diehard enough to hustle people and partner back then.) Agreeing w / @Austin Fruechting@Matthew Paul
@Christian Wathne -- I too was in Seattle / Bellevue and remember running around looking at all these signs of for sales for cheap thinking: "Man, houses are a loser! Glad I live in an apartment!"20-20 hindsight--
I think we all did the best we could with the information we had at the time, even though I am kicking myself a bit.
I had a close friend who was divorced in Redwood city next to Crossroads mall and refi'ed at the peak, terribly underwater, and wanting to walk... Good thing he didn't! (I told him to but he said he would just eat the 100k loss as we had known eachother for a few years and he was dying mentally)
It took him 10 years to get to these "great numbers" in Seattle we see today... It's finally what it should have be return-wise had the market not plummeted!
I was doing just fine on my own. Had about 300 units. Was talked into partnering by someone out of the country. He wanted to go 50/50 on the deal. He was impressed by what I did and he wanted to buy something with me and let me "do what I do"
Shortly after buying he started to try to micromanage. Wanted me to do all sorts of stuff. I told him "your not my boss dude".
Turned into lawsuits. I tried to buy him out for all his money in and then some. Offers to be bought out for the same. Finally cost me about $500k in legal fees. My paying him out (profit to him). Damage he did to my property while he tried to run things himself etc.
Never again. No such thing as "partners" in RE. Just marriages. If you wouldn't marry the person don't partner.
On the flip side those properties are worth a lot more. One property I almost bought with him (before things blew up) I ended up buying myself due to this. Paid $3.2m. Appraised at $5.9m. Cash flows and I have $0 cash in after my refi. If I was partners with this a hole he'd have 1/2 of that property.
If he'd just sat back and let me do my thing I'd have made him a ton of money.
"If you wouldn't marry the person don't partner." <-- Love it. Any tips if you HAD to partner with someone, what would you look for the next time / tell them?
Made $150k at the peak of housing market in Dublin,Ireland.
Put it all in stocks on arriving Cleveland OH in 2006.
You know how that story ended.
Wiped out and started from ZERO.
The only mistake that has come close since then was losing $20k in EMD+appraisal costs at due diligence in January 2016 because I failed to read the contract my own attorney prepared.
Invested in a 2nd vacation home instead of investment property. Sure we had fun there but the opportunity cost was huge. Could have invested the same amount and had positive cash flow instead of negative. Wish I would have known at 35 years old what I know at 58 years old. Avoid a second home until you have the wealth you need to live the rest of your life.