The majority of us have been there. Sitting on the floor or edge of chair as our moms are about to remove the band-aid. We all know that going quick is the best process to use to ensure minimal amounts of “sting”.
When it comes to real estate and making mistakes, you want to do the exact opposite! You want to remove the band-aid nice and slow. You need to feel that sting. In the long run, you’ll be happy you did.
Last week I wrote an article about a huge bone-headed mistake I made regarding a deal. This prompted a great discussion down in the comment section (nice work BiggerPockets community!) and I noticed a few people mentioning, “you just need to move on” after making a mistake.
The question is, should you immediately move on after making a mistake?
In sticking with the analogy, let’s take a look at the two options. Ripping of the band-aid quickly (moving on immediately after mistake) or slowly removing the band-aid (NOT moving on immediately after mistake).
How to Invest in Real Estate While Working a Full-Time Job
Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.
The ‘Rip-Off-Quick’ Real Estate Band-Ad Method
When you make a mistake in real estate, the tempting option (since it is least painful) is to throw your hands up and say, “My bad! Won’t let it happen again. Moving on.” I’m not saying to sit there and never let go of the mistake; however, by taking this route you rob yourself of a valuable opportunity to learn.
You may think to yourself, “won’t happen again”, but if that’s all you think before moving on, how much confidence can you actually put into that statement? This is the problem with removing the band-aid too fast. It drastically reduces your ability to rationally analyze the situation and figure out ‘what-went-wrong’.
On the other hand, “pain adds value”…
The ‘Rip-Off-Slowly’ Real Estate Band-Ad Method
Eeek. Ouch. Ohhh.
It hurts. But as kids, it reminded us to do our very best to AVOID whatever it was that put the band-aid there in the first place.
This concept is the exact same for real estate. How can we as flippers, wholesalers, landlords, private money lenders, etc. avoid the “ouch mistakes” that have placed the real estate band-aid on us? If you want to truly dodge future bullets, you can not just move on. You need to harp on it a bit and feel some pain/frustration about whatever boneheaded move you did.
It’s human nature to want to run and hide from these sorts of things, but if you put yourself through the pain and anguish, you’ll be thankful you did later on down the road when you don’t find yourself say, “Whoops, I Did it Again!”
Pain & Anguish Learning Process
In order to slowly remove that band-aid, consider doing the following…
- What was the scenario? Don’t skimp on this either. Ask yourself ‘what’ it was, ‘how’ you got there, ‘why’ you were there, and ‘who’ you were there with. What days did things occur on? Time frames are super important.
- What was the goal/wanted outcome? Were you looking to put a house under contract? Purchasing a house? Preparing to close a private money loan?
- What was the ‘actual’ outcome? Compared to your #2 answer, how did the scenario play out in reality?
- Any ‘fixable’ variables? Is there something that could have been differently that would have affected the outcome? Sometimes it is just flat out bad luck and totally out of control. If this is truly the case, then yes, move on! (Warning: make sure everything was sincerely out of your control.
- Implementing ‘fixable’ variables. If #4 yielded some things you could have done better, how are you going to implement them going forward?
Join Me in Slowly Removing my Band-aid
No better way to show something than by using a real life example, so I’ll use the one I spoke about in last weeks article.
- I was presented with a wholesale deal on a Tuesday. A meeting was set up for Thursday morning of that same week. I figured I would ask a few more questions and then pull the trigger if everything still ‘made sense’ after meeting.
- I planned on purchasing a wholesale deal that would be put into my land contract portfolio.
- As I was meeting with the guy, his phone rang and the other investor he told about the deal bought it. The house evaporated right before my eyes.
- The timing of the meeting. My ‘politeness’.
- Next time, I will not be so polite and at least ask if he can meet up any sooner.
For me, I could make it as simple as, “don’t be so slow next time, I’m moving on” as the solution but in all actuality, there was more to it than that. I needed to be more assertive and request a meeting sooner. “Being too slow” is too general. You should nail down ‘what’ caused you to be so slow.
Bottom line, access the mistakes you make honestly and dwell on them a bit before moving on. Don’t dwell on them forever, but dwell on them long enough to be able to analyze the mistake. It hurts at times and will get you upset, but it’s worth it. Remember, if you find yourself saying, “whoops, I did it again”, you are going to really really be angry with yourself. Avoid that at all costs.
How about you? I know from my other article (thanks to the comments) that many others have made mistakes. Do you take any steps to reduce the odds of it happening again? I know I’m always looking for any suggestions possible to ensure prior mistakes are never repeated again! Leave your comments below.