I am restarting in REI after some time and mistakes.
(I apologize for the length, but I find this information necessary)
I started my investment journey back in 2021 in Oklahoma. I had been researching REI and mindset and soaking up any knowledge I could get my hands on. I also used my new mindset to fix my mindset. I had lived as a consumer my entire life and had a lot of repair to do. Eventually, I got to the point where I felt I had enough to start moving. I was able to show my value to an out of state investor as a foot man. I did small tasks for his properties and identified and analyzed potential deals for him. Eventually, I found a good flip and he offered to go in as a partner on it. He provided the lender and I handled everything. I found the contractor, agent, and even did some of the work myself. I was able to raise the down payment privately. The deal went well. The profit wasn't amazing due to some surprises and my inexperience. The private money plus the promised return from the down payment took most of it. I was happy with that deal, because I learned an unbelievable amount from it. I walked away with around 1k.
My next deal was very similar. I found it, contracted, and did some work myself. During that project, I ran into several massive problems:
1. The contractor (same one from the other deal) spent less and less time managing his workers. I didn't have the knowledge or experience yet to realize that things were about to get ugly. Work either wasn't getting done, or it was causing more damage or problems. Plumbing was done poorly and created a massive leak, countertops were dragged across a newly finished hardwood floor, paint looked like it was done by a four year old, etc.
2. I am military and had to PCS out of state in the middle of the project that should have been finished by then. I was unable to see any of this and didn't have a good contact to manage it for me.
3. I had an agent (same one from the other deal) who had agreed to keep an eye on the property and progress for me. She did for a little while, but then just stopped calling or answering.
The whole thing had fallen apart. I was able to contact another contractor who knew mine to go in and fix everything and get that property out of my hair. He fixed it all at a discounted rate, I found a new agent to sell, and the market stopped moving. Nothing was selling. The property sat on the market for 5 months at much lower than it would have sold in a week for if I had exited on schedule.
The loan I received for it was private money from an investor, and he was willing to extend the contract. The expected profit was around 70k. After the sale, everyone got paid and I walked away with around 400 dollars. I consider myself lucky and I took those lessons.
Unfortunately, the investor who provided the loan had taken my contractor referral during all of that. He was supposed to manage maintenance and rehabs for all his properties in the area (probably around 100). He did very little and took the money for months before the investor realized what was happening. My referral turned into a massive loss for someone I was on good terms with. He hasn't spoken to me since and I'm certain that that relationship is done.
During all of that, I had found a property at my next PCS location. My plan was to purchase under my LLC, then rent it to myself. After doing a live in rehab, I would move to something else and rent it out. I had the lender lined up, as well as the down payment and rehab costs. Due to the issues with the previous property (which were still ongoing), my down payment went to that problem. I located a down payment as private money and waited for close with my family in a little rented cabin. A few days before closing, the private money backed out and I had little to no money left. After an extremely stressful two days, I was able to find a new lender and a new down payment and moved in. I had been hit with several major setbacks all around the same time and it broke my financially and emotionally. Instead of learning the many lessons in all of that, I lost all interest in REI. I let myself fall back into a consumer lifestyle and mindset and quickly buried myself in debt again.
I still have the property. I did indeed rehab it and am at the tail end of the refinance. I will probably stay here and retire here. But now we're back to the present. I made so many mistakes, I learned all those lessons, and I climbed back out of that hole to put myself back in the right mindset. I have put myself back on the right path to remove this debt from my life. I am currently researching the Louisville market and started networking with investors and wholesalers. I am going to dive back in, taking the lessons I learned from some major setbacks. I am making this post in hopes that it helps someone else. I am not really looking for advice, although it is always welcome. I am now aware that due to the fact that I maintained my job, and never actually walked away from a negative deal, it was never really that big a problem. If you're thinking of commenting something along those lines, and telling me about how bad you crashed and got back up and kept going, congratulations. I am proud of you. I didn't do that right away. It took me time to figure myself out and learn the lessons from my mistakes.
If you got this far, thank you for reading. I hope you were able to get something from this.
