I Lost $50K On My First Real Estate Deal…
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Summary
- I lost $50,000 on my first real estate deal.
- A friend told me about a guy selling houses in Ohio for $50,000 each.
- These houses supposedly made $6,000 a year in cash flow.
- The seller specialized in finding these houses and setting buyers up with a property manager.
- I decided to buy one to test it out.
- The house turned out to be a disaster: it was supposed to be a three-bedroom but was actually a two-bedroom with a mattress in a closet.
- The house didn't have electricity and was illegally running power from the neighbor.
- The driveway was in such bad shape that people couldn't park on it.
- A real estate friend found out that the seller bought the house for just $199.
- I ended up selling the house for only $20,000.
- I called the seller to thank him for teaching me a valuable lesson at a "cheap" cost.
Video
How To Take Action
How to Avoid Costly Mistakes in Real Estate and Business
I would suggest implementing a few strategies to avoid costly mistakes like the one I made in my first real estate deal. It doesn't matter if you're a small business owner, entrepreneur, or just interested in personal growth—these steps will save you time and money.
Investigate Thoroughly Before Investing
Do Your Homework: Always research thoroughly before committing to any investment. Whether it’s a property or a business decision, dig deep. Look up public records, talk to experts, or even visit the location yourself.
Rely on Trusted Sources
Use Reputable Experts: When relying on recommendations, make sure you know the reputation of the person or business suggesting the deal. For example, verify the credibility of property managers or sellers by checking reviews and asking for references.
Small-Scale Testing
Start Small: Before diving into a big investment, test with a smaller, less risky endeavor. Like I did by buying just one house first, apply this “test-the-waters” approach to minimize losses if things don't work out.
Analyze All Details
Check the Facts: Verify all details. Make sure what you're getting is what's being sold. This could be as simple as verifying square footage, amenities, or even something as obvious as whether a house has electricity!
Learn from Mistakes
Learn and Move On: When mistakes happen, and they will, see them as learning opportunities. Call it "tuition" in the school of hard knocks. The important part is to adapt quickly and avoid making the same mistake twice.
Build a Support Network
Consult a Network of Experts: Build relationships with trustworthy experts who can guide you. A good real estate friend or a business mentor can offer valuable advice and insights you might overlook.
By implementing these strategies, you’re setting yourself up for smarter, safer decisions in business and personal growth. Keep it low-cost and high-value!
