The Ups and Down of A Real Estate Business
Running your own business, especially in real estate, can definitely be a roller coaster experience! There are highs and lows, but staying consistent and focusing on process over results (especially at first) will keep you moving in the right direction.
When I last posted, I was looking into a triplex, had a fix and flip under contract as well as another buy and hold rental. Things were looking pretty awesome! Then, as life tends to do, things started to not go as planned. Shocker, I know.
Over the last 6 months, I've had 6 properties go into contract but was not able to close on them:
Single family buy and hold in August
Single family buy and hold in December
Single family buy and hold in January
Triplex in March
Fix and flip in February and March
Fix and flip in June
On top of that, the City of Philadelphia court system has been held ransom by online hackers, utterly bringing city paperwork to a halt for many deals. It's not always easy!
I have been able to close on some other properties, at least, but I wanted to point out that it won't always be smooth sailing. There are times where some losses will happen. You just need to stick to your plan, minimize the damage, and continue to optimize the process.
Here are a list of things that ultimately led to these deals failing. I plan on learning from them and hope they help you as well:
Getting into closing with a wholesaler before title was cleared. For two of these properties, they were good deals, but there were outstanding utility bills due to missing water meters that posed as huge unknowns in terms of cost, and it is some tough negotiating to get the seller to be willing to put that money into escrow for when a meter can be installed
Jumping on the first decent deal that came my way. I wish I would have been a bit more patient and have been able to pick up the really awesome deal that came a little later.
Looking into C class markets and "getting greedy". The high return in these areas comes with increased risk. The likelihood that you'll meet your projected returns decreases here. It is better to be patient and get in on a good deal in a B class area.