At the Think Realty National Conference & Expo 2017 our editorial staff hit the floor running with the popular Street Smart questions. In this recap, we will be sharing with you one of the questions we asked vendors and their responses with the TR editorial staff’s tips and tricks on how manage such situations.
What is the worst mistake you’ve ever witnessed an investor make?
Let’s take a look at what the respondents had to say.
Gavin Harriott Straightline of Foundation Repair and Drainage Systems
“Well, I’d say Putting the cart before the horse. They [new investors] come in, do the repair or remodel and then they go and do all their due diligence to make sure all their stuff is done. Then the inspector comes in and says they need foundation repair which in turn makes the investor, who just remodeled or updated the home, start breaking up all the new stuff that’s been done.”
Think Realty: A couple ways to make sure this doesn’t happen to you.
- Get an inspection before starting your repairs. Get your scope of work complete and figured out ahead of time. Don’t start a project before you have the property fully inspected.
- Bring in a licensed and insured contractor to give you a full spectrum of work to be completed. Between the contractor and your inspector most if not all of the visual repairs should be covered. Make sure to have contingency funds in case there are issues once you start the renovation, such as hidden pipes, electrical and such.
There is an old adage appropriate for this story, do it right the first time, you won’t have to do it again.
Alex Sadler of Renovation Gurus LLC
“One time we bought houses for a hedge fund company for them to rehab and they rehabbed the wrong house on the correct street. They got the house numbers mixed up but the crew kept showing up every day. And every day they realized the lock box wasn’t working and that someone kept changing the lock box. They remodeled the whole house and after they were done is when they realized they remodeled the wrong house. Apparently, the house was owned by someone else who then was the proud owner of a newly remodeled home. The hedge fund company ended up buying the home from him.”
Think Realty: Wow! What a story! This kind of error could easily be made yet common sense might say otherwise, but remember common sense isn’t always common. More than likely a mistake like this is something simple as a slipped finger on a key board or reversing a couple numbers.
- Double check each detail. Instead of winging it, read all documents thoroughly and do your due diligence! If you already have a contractor they will also be reading over all the documents.
- Confirm details before work is started. This should be for any project and overall, an actionable item to fit into your daily life.
Daniel Moore of Propelio
“The worst mistake I’ve seen is when people become a motivated buyer, someone who is so eager to get something done they grab whatever they can get. They bypass common sense; they bypass due diligence and then they become the motivated buyer. That, “I’ve just gotta buy something,” mentality. When you’re in a market that’s tight, don’t become the motivated buyer. If it doesn’t meet your numbers and you don’t have any deals going on, then you just don’t have any deals going. Don’t become the buyer that overpays for something.”
If you are new to investing or a seasoned fulltime investor surely you have heard to not buy in desperation. For tips on what to do and not to do about desperation in your investing check out this podcast by Kevin Guz published on the Think Realty website on October 28, 2016. The article titled, Stay Out of Desperation Mode to be a Successful Investor, will give you excellent insight on how to avoid becoming the desperate investor.
Heather Elwing-Dixon is the assistant editor for Think Realty Magazine. She can be contacted at firstname.lastname@example.org.