How I Almost Lost $30,000 Last Week

Last week we were looking at another house to buy.

Purchase price was only 27K, and it was a few blocks from the square in Columbia, TN.

It was also currently rented out.

These are all GOOD signs.

It almost felt too good to be true.

I jumped on it, letting the wholesaler know that I wanted it.

We got our contractor in the house…

And after giving us his normal breakdown of repairs needed…

He said “You should really have a foundation guy check this house out”...

Just that one quick sentence.

I was tempted to ignore his advice…

I really wanted to buy this cheap, good deal.

I’d bought houses in the past with iffy foundations before…

Without a “foundation guy”...

And most of the time, they worked out.

But, there were a couple of times where doing that BACKFIRED.

I can remember two flips we did where our profit was slashed by $20,000…

Because we discovered the foundation issues AFTER we had bought the house.

So, reluctantly, I put my excitement to one side for a second…

And had our Project Manager bring in a foundation expert.

The foundation guy looked at the house and said that the foundation was messed up in MULTIPLE AREAS…

Piers were falling down, beams were sliding off…

He basically said the whole thing needed to be redone.

(This WAS a 100 year old house BTW)

Estimated cost to do that?

$30,000!!!!!

That got my attention.

We had budgeted about 20K TOTAL for repairs on this deal.

That’s the most we could spend and still have it cashflow.

But I was planning on spending that on the interior of the house…

And now we’re being told that we have to spend an extra $30,000…

Just so the house won’t fall down!

So to make this house work…

I’d basically have to get it not for 27K…

But instead, FOR FREE.

Reluctantly, again, I contacted the wholesaler and let him know we wouldn’t be moving forward.

But after that I honestly felt good…

Knowing that I had dodged a MAJOR bullet.

Remember guys, it cost me about $40,000 in “learning lessons” to GET me to a point…

Where I had enough discipline as an investor to pass on a deal like this one.

The “old me” would have just said “let’s make it work!”

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One lesson I’ve learned recently, as an investor, is to only do REALLY GOOD deals.

The mediocre ones suck up a lot more time, energy, AND money (because they’re not great deals)...

And it’s better to be patient and wait for one that you are really stoked about.

If you are having trouble finding that type of deal…

You probably need to MAKE MORE OFFERS.

Most people I talk to who say “I can’t find deals” have made literally ZERO offers in the last month.

That’s the exact reason why they aren’t finding deals!

You gotta get in the game.

You’d be surprised by just how often someone will accept your “lowball” offer (which is really just the price you need to get it at to make sense as a savvy investor).

So, I hope this email encourages you to make some offers, and to also have the patience to wait for those GOOD deals.

Who here has a similar story?

Brian

Brian EllwoodComment