REI Experiences
Please post any funny stories, insights, Bad stories, lessons you learned. Your First purchase etc..
- My First purchase - - I was a network technician, I met a client that owned 2 real estate offices. She introduced me to her husband who owned a lot of property. I did a job for him and we got to talking, as it turns out he started investing 7 years before after purchasing Carleton Sheets and then attending a Tony Robbins seminar.
He was now a millionaire and prepared to cut me in on a deal, after thinking the deal over I realized he was ripping me off, I told him, I earned his respect, and he helped me buy my first property no money down. I got 2 investors. $30,000 of rehab and 4 months later I have an extra $50,000 in my pocket. I throw him $10,000 for the introductions and direction. He is happy, my investors made $20,000 each they are happy. 4 things I learned during this process.
1. It’s all in your mind, if you focus and persist life gives you what you know you can have.
2. Make contacts… this and most of my properties come from my lawyers, accountants and bankers
3. The numbers don’t lie. If you put it on paper and pad your costs you will profit.
4. Always create a win-win situation and portray it as a win-win, don’t expect the investor to see what you see, lead him to see what you see.
Excellent Post AC4P. Please share your story about how you were going to be ripped off, so that other new investors don't fall for the same thing.
Thank you,
Jesse
Well the property was a big time rehab project easily 50G to get to Market... He told me it would cost him 30G's to rehab and that the property would be worth $350,000 (FMV) after rehab.
He purchased it for under 180,000 (as I later found out) he wanted me to pick it up for 250,000 pay 10,000 for closing and 20,000 to him for the favor. A total of 280,000, so at this point I see 40,000 on the table, I'm excited, he wants me to sign papers. Signing papers made me nervous, So I told him I would call him tomorrow with a final answer.
That night and the next day I did a lot of Due Diligence, Comp's and Contractors, and I discovered the house needed $50,000 in rehab and FMV would only be 330,000 tops 310,000 for a quick sale.
Now the best I can hope for is to break even and he gets away with making over $90,000 on me. I was pretty mad. So I told him the deal was no good explained why, he viewed me as a peer and not a pawn. He helped me and walked me through my next 2 properties.
The lesson here is. Don't Bid on a property for its future value bid on a property at it current value.
It's all a numbers game.
You should write the complete story as an article for new investors. The one thing I hate more than anything, is to have people feel used.
Great story.
Thanks again,
Jesse