Any Bad Experiences?

Question

I know a lot of people get on here and talk about all the positive experiences they've had with real estate but just like in anything competitive, with wins also comes losses. Are any investor willing to tell a story about when an investment that went bad and how we could avoid situations like this in the future by doing something differently. I am starting the process of investing in out of state rentals so any advice on the process would be greatly appreciated.

Have a great weekend everyone,

Bill B. · Answer

I failed hard on a bunch of deals during the recession. I passed on at least 5 deals while haggling over a few thousand here or there. All those properties have more than doubled some have tripled. Haggling over $2500 give to take On each property cost me at least $200k for each property I didn’t buy. That’s a million dollar mistake in one year.

Account Closed · Answer

Not knowing what termite tubes were.... Now, like poison ivy and wasps, I can spot them from a mile away.

I still drive by a couple properties I lost out on and grump at myself about not putting out stronger offers that I knew were still a great deal even at that time.

Not doing my due diligence on inherited tenants and/or having obvious nutcase slobs booted ASAP when I inherit them.

Not supervising labor closer, and/or trying to be nice vs a "hard boss." Still struggle with that one.

Pat L. · Answer

Had a few evictions back in the dark ages but nothing serious, they left without recourse or trashing the place. Got stiffed with the odd water bill & a couple of properties were left in bad not finished rehab shape but not enough to lose money. I'd just flip them to others without touching them.

My biggest losses were selling those back when I started to recover cash to buy more & release the debt strangle. Some of those are in the very high 6-7 $$ figures now.

BUT nothing in my history of REI compares to the losses my REI partner just commiserated to me that he suffered in the Covid-19 equities market pull back. NOW he's ready to grab more REI with us, after passing up a few nice deals we offered when his stocks were booming!!!

Amy Kendall · Answer

I've been lucky enough to not have a devastating bad investment, but last year we did purchase two new duplexes out of state and had quite a few issues with the builder.  The timeline was an issue, and he ran out of money and couldn't finish, so we released 20k from escrow to help finish the project.  He was supposed to also landscape the property once the snow was gone, but he never did that.  The deal could have easily fell apart at so many places, and we could have been really bitter about the whole experience, but instead we kept on going and ended up with a two great, new, cash flowing properties.  We did end up paying a landscaper to finish that up.  I sincerely feel like if you plan ahead and have enough reserves, then what could be the most miserable experience for another investor might just not be as bad for you.

Russell Brazil · Answer

Plenty of bad experiences. I lost money on my first 3 flips. Ive sold 2 rentals at losses.  Done a number of evictions.

Zack Williams · Answer

@Russell Brazil

@Amy Kendall

@Bill Brandt

@Pat L.

Thank you all for the stories, a lot of good info here.

Any Bad Experiences?

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