My last two articles at BiggerPockets (here and here) described BRRRR deals that went well. This one did not.
Indeed, I find real estate investment and most entrepreneurship writing to be overly optimistic. There are rarely articles on failure. Instead, each one is "How I did Great at X" or "How I Made a Gizillion Dollars with Y." And this paints a false portrait for newbies, who likely get down with any failures they have, when in fact, most of these people writing about one success after another have as many horror stories as success stories.
Anyways, with this property, the results were as follows,
"If you add our closing costs, we’re in over $80,000. So we’re all into the property for close to 95 percent its value. It could have been worse, of course. We have been upside down before. But this is definitely not how you do BRRRR right."
I also describe many of the mistakes I made. One of which was "Becoming Attached,"
"We’ve backed out of deals we’ve gotten under contract in this way before, but the fact we had it under contract did add a bit of a feeling of commitment. Also, it’s a beautiful, old home with a lot of charm. But we don’t buy pretty houses; we buy good deals. As hardened as I am to that, I think those things might have tilted me over the edge to purchase a house that was on the edge to begin with.
"Don’t become attached to a property. It’s just an investment. And never be afraid to walk away."
Check it out.
"Every day is a new life to the wise man."
The Righteous Mind
Star Slate Codex
Consulting by RPM