I first got interested in real estate investing about six years ago after watching a late night Carleton Sheets infomercial. I ordered the course, and after reading it from cover to cover the day the UPS guy dropped it off on my doorstep, I was chomping at the bit and ready to make my first million!
Fast forward two years and I had my first rental property……along with a couple of deadbeat lease option tenants who decided to trash the house and skip town for Alaska in the middle of the night. True story. Had I bothered to screen them properly, this could probably have been avoided, but I was so eager to get a paying tenant into the property that I didn’t bother. (Mistake #1).
I still remember walking into the house after they vacated, and almost getting sick to my stomach- partly because the place was a filthy disgusting mess, and partly because the tenants were supposed to exercise their option the following month, and I would be getting my first big fat check from my real estate investing endeavors. I already had the money spent in my head. (Mistake #2).
When I bought the house, it had very little equity (Mistake #3), and I had very little cash reserves in my bank account to fall back on if /when something went wrong (Mistake #4). Luckily for me the real estate market was going bananas at the time, so in the short period that I owned it (less than two years), the value increased close to $100,000. Crazy.
I could have sold the property at a discount in as-is condition and still made a tidy little profit, but I decided it would be a better idea to rehab it instead (Mistake #5). I had zero rehab experience at the time, so you can see why I thought this was such a good idea. *sarcasm alert*
I decided to do all of the work myself in order to save money (Mistake #6), and it ended up taking me 3 months to complete a rehab that should have taken one month tops. I wish I would have taken pictures of the finished product so I could post them here and you all could get a good hearty laugh. It was that bad.
After a three month rehabbing nightmare, I was so sick of this property that I never wanted to set foot in it again. I was also pretty close to running out of money, so I had become a bona fide motivated seller.
I received a low ball cash offer from an investor shortly after I put the house on the market, and I took it without hesitation. We closed a few weeks later, and I ended up walking out of the closing with a check for $50,000. Thankfully I sold it when I did because the market in Tampa started to tank just a few months later- I got out just in time!
The bottom line with this deal is that I got VERY LUCKY. I basically did everything wrong, but ended up making money anyway because back in those days it was so easy a Caveman could do it. If I attempted to pull off the same deal in this market, I would without a doubt get creamed.
Thankfully, though, I made it out unscathed, was able to learn from my many mistakes, and use the knowledge I gained from them in my future investing activities. Onward and upward!