3 Real Estate Setbacks I’m Grateful for This Thanksgiving

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Oh, the joys of Thanksgiving!

This wonderful holiday is full of delicious cranberry sauce, traveling to see family, eating lots turkey & pie and spending time reconnecting with friends. We love the football games, time off and, of course, the shopping deals on Black Friday! There are a lot of reasons I love Thanksgiving, but probably what I love most about this holiday is the meaning it represents.

It is all about being thankful and grateful. Of course, it is easy to be grateful for the “good” things going on in our lives – our family, our friends, our kids, our health, food to nourish ourselves, a roof over our heads, and money in our bank accounts.

However, it is not as easy to be grateful and appreciative for the “perceived” setbacks that happen in our lives – especially in our business lives. If you are a real estate investor, you have experienced some type of setback, frustration, or disappointing situation during the course of this year. Whether you are a newbie just getting started or a seasoned investor with years of experience and properties under your belt, there are always “perceived” setbacks that we need to deal with and move through as an investor.

Related: A 3 Step Exercise in Gratitude to Refocus Your Mind for the Holidays

Just to be clear – I am using the word “perceived” because it really is all about perception. We choose the meaning we place on everything that happens to us. We choose to refer to a situation as “good” or “bad.” We can choose to grow and learn from a setback, or we can choose to get discouraged and become resigned. It is up to us.

As 2014 comes to a close and we celebrate Thanksgiving this week, it’s Liz (Matt’s wife) back this week to share three “perceived” setbacks that happened in our real estate business that I am grateful for.

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3 Setbacks I’m Thankful for This Holiday Season

1. A Fire at One of Our Properties

During the spring time, we experienced our first fire at one of our single family home rentals. In the 10 years we have owned properties, we have never had a fire before. I am sure many of you would agree: there is a first for everything!

Well, this was certainly a learning experience for us. We actually found out that our property had a fire by an insurance claims adjuster on a Sunday morning. You would think our tenant would be the first person to call us. Nope! Those claims adjusters are very aggressive in these types of situations since they are looking for business.

We were really grateful the tenant was safe and not harmed. The rest of that Sunday was spent dealing with our insurance company, the restoration specialists who were hired to board up/protect the property and the claims adjusters who were trying to get in on the “action.”

Here is why I am grateful for this fire: this single family home was part of an older portfolio of ours. This single family home was always meant to be sold instead of rented. However, due to changes in the local market, we decided a few years ago to rent the property out of necessity. After the dust settled with the insurance company, we were approached by a real estate investor to sell this property to them, which ended up being great for us. The fire at this property and the sale of this single family home has caused us to look at our portfolio differently and assess the long-term strategy with each buy and hold we own.

As they say, good can come from any situation.

2. Vacancy

I have never met a landlord who likes vacancy. As some of you may know, we shared in last week’s video blog five strategies to fill vacancies. This is a “hot” topic for us right now. Over the course of the last couple of months, we have more vacancy in some of our buildings than typical for a variety of reasons.

Vacancy = no tenants = no rent. Obviously, we don’t like this equation too much!

However, as a result of these vacancies, we have been revamping our “marketing and leasing” process and activities. We are exploring new and creative ways to market our units. We are also tightening up our “process” on leasing units. It is completely unacceptable to allow properties to linger too long vacant on the market. This whole process has taught us the importance of managing this process closer, finding ways to be on the cutting edge, and doing our homework.

Just because you are a landlord and have been a real estate investor for many years, it does not mean you are shielded from vacancy. Just like marketing any product, you have to be ahead of competitors, know your market, and do what others are not willing to do. As a result of beginning to revamp this area of property management, we have been able to close 4 new leases in the last week. I am also excited to share on a future blog some of the creative marketing techniques we are trying out.

Again, good can come from any disappointing situation. You just have to look for it!

3. Ineffective Partnerships

Whether it has been on previous blog posts or during the BiggerPockets Podcast interview with Josh and Brandon, my husband Matt and I have made it very clear that when we began, we got involved in too many different facets of real estate investing.

Related: The Power of Gratitude: How to Boost Profits & Spread Joy With Thank You Notes

During this time of “exploration,” we got into a project with a partner who let’s just say has not worked out too well. Without getting into a bunch of boring detail, I’ll simply let you know that the project has been at a standstill, and we are in the process of developing an exit strategy for all involved. I am grateful for this happening because it has reminded me the importance of being incredibly careful with choosing a partner.

If you are the type of person who “trusts slowly,” then this should be easy for you. However, if you are the kind of person who “trusts quickly,” then it is best to slow down and take baby steps before jumping in to a becoming a 50/50 partner in a project with someone. If you are considering partnering with someone, start small and take baby steps — just like you would if you were considering marrying someone!

In closing, I would love to hear from you on what “perceived” setbacks you are most grateful for. Again, it is all about perception. Don’t forget – we humans are meaning-making machines. We have the choice to make anything that happens to us to mean something positive or negative.

Lastly, I am grateful for everyone who has read this blog of any of the blogs we have been posting for the last several months. It is an honor to be part of your real estate investing adventures!

Investors: What items, either positive or negative, are you thankful for this holiday season?

Don’t forget to leave a comment below!

About Author

Matt Faircloth

In 2005, Matt founded The DeRosa Group along with his wife, Elizabeth. At the time, the two person company owned and managed two assets – a single family home and a duplex. Over the last nine years, they have grown the company to a 12 person team owning and managing over five million dollars in residential and commercial assets throughout the central NJ and Philadelphia area. One of DeRosa’s mantras is “to make money while making a difference.”

11 Comments

  1. Dan Shaker

    This has been a very insightful blog. Yes, it’s true that it’s very easy for us to be thankful of all the good things or positive things happening in our lives. But I think some of the negative things that actually turn out to be positive in its own way should also be thanked for. If not for those negative things we won’t be able to learn to deal with the same problem that we can encounter again in the near future. Things that were so hard to swallow were things that actually taught us lesson, it may not be the easy way but still we have learned and we already know how we will be able to deal with it once it happen again. It will all boil down to what the writer said “good can come from any disappointing situation”.

  2. Mindy Jensen

    I am thankful for the deals that didn’t go through. I learned from my mistakes in writing offers. The duplex next door to us went up for sale, and we bid on it. We came in low, and the winning bid was not only higher, but for all cash. We learned a lot about our market that day. The person who did come out on top did an excellent job of updating the property and screening prospective renters to get the best possible tenants. Since they live right next door to me, it is important that the landlord screens. Great tenants, one of the biggest reasons I wanted to buy the property, but no money out of my pocket, and the landlord is a long-term guy. Win win win!
    Thanks for reminding me that not everything that seems to be a setback is actually a setback.

    • Elizabeth Faircloth

      Hi Mindy,
      You are so welcome for the reminder! Thanks too for sharing what you are thankful for. That is a great one – being grateful for the deals that did not go through. We have had that happen many times as well. I have found that when deals don’t go through it makes us work harder on the next offer.
      Appreciate you sharing!
      Liz

  3. David Weiss

    An excellent example (three examples, really) of how really great learning opportunities can come from things going badly. We’ve all heard of “learning from our mistakes” but this takes it to the next level and shows how we can learn even when unfortunate circumstances aren’t directly due to mistakes we’ve made.

    Great post. Thanks for sharing!

    • Elizabeth Faircloth

      David,
      You are so welcome! So glad you enjoyed the blog post! I guess it really boils down to – reminding myself to find something I appreciate in every situation. This is not the easiest to do, but certainly can help create more peace and positivity in your life!
      Thanks again!
      Liz

  4. Shawn Lepley

    Great post! Giving thanks and reflecting is an important virtue. There are learning opportunities with everything we do everyday and ways to improve upon relationships and our business.

    You make a great point with taking baby steps. This is so true when exploring anything new, if you end up having a problem it will be small, taking baby steps. Going full bore into something unfamiliar, is a recipe for disaster!

    • Elizabeth Faircloth

      Hi Shawn,
      It is so nice to have you comment on our blog post! I really trust myself most when I have taken baby steps in a new partnership or in a new situation. This helps build my confidence in a new area and also helps decrease risk.
      Take good care and thanks again for reading/commenting!
      Liz

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