Surprise, Surprise!
You may have heard the expression, “Most surprises in business are bad”. In real estate investing, people say, “Every house comes with a surprise”. I can testify from personal experience that most of the surprises are challenges. I can only think of two (out of dozens) that were good! They both involved extra acreage that didn’t show up in the first title search. So, the bulk of the surprises were problems.
Here’s the article:
As a real estate investor, or business owner in general, you have to decide if these types of challenges are something that you are willing and able to overcome. In fact, in RE investing, you could argue that the person who is the best problem-solver gets the biggest reward. I’ve found that I can mitigate the risk from most problems and/or reduce the probability of large issues by conducting due diligence. Here’s an example: I got an accepted offer on a house and had a five-day inspection period. I had written repair estimates from two or three contractors. I didn’t get an inspection done, though, and I closed on the house. When the utility company turned on the water, the contractor said it sounded like someone spraying a hose in the house! Multiple water leaks, damaged drywall, etc., etc., etc. How could I have avoided this? Simple. When the contractors saw signs of water damage or do-it-yourself plumbing (using duct tape, no less), I could have had an inspection done. I mean, I haven’t seen this much duct tape since Macgyver. The $150 could have saved me $1000 (if I negotiated the price), or at least it could have helped me to have more accurate rehab estimates.
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