Deal That Got Away -- Let It Go!
In real estate investing, deals come and go. Sometimes a really attractive opportunity presents itself, and we miss it! In such times we as investors go through a whole range of emotions. But in the end we need to learn from the experience and just let it go. It can be hard, but as long as we learn from the experience, and wish the investor who is able to profit from the deal the very best, in the long run we'll come out ahead.
To let you know I understand your pain if you're in this place, allow me to share an example of one that got away that I still dream about. Over time I've learned to control the strong emotions that come up, and I also remind myself of the lesson I learned.
Back in 2001 I began negotiating a package of properties in Rocky Mount. One of the owners lived in Atlantic Beach, very close to a very popular section of the beach, and within walking distance of the beach and sound. Sitting on his screened in back porch you could clearly hear the ocean as if you were there and sitting on his large screened in front porch you could see the sound. His property was a duplex with each side being 1000+ SF, 3 BR, 1 BA. About $25,000 worth of work was needed on the property to put it in mint condition. I had gotten the town to agree to allow me to convert it to two townhomes and sell one side, in which case I could keep the other side free and clear. The appraised value was $325,000. My contract price was $150,000.
At the time the company I was with that had the property under contract consisted of myself and two partners. My partners did not want to buy a property at the beach but I did. They did not want to assign the contract but rather preferred that I enter into a new contract. So, I sent to the closing attorney a release from contract AND a new contract in my other company's name only. As it turns out there was already a backup offer in place and I did not realize this. As soon as my contract was released the other party's contract kicked in and my contract became backup. Needless to say I lost the property. Granted all I was out of pocket was a few trips to the beach for due diligence and our inspection fees and appraisal fee but I was out a lot more in terms of total losses. I could have had a vacation home at the beach, in one of my favorite areas, and could have had a good measure of equity.
About two months ago I saw a friend of mine in Rocky Mount who lives next door to this duplex. He casually advised me it had recently sold for $700,000! All of the old emotions swelled up again, but I quickly let them go.
If you're a serious investor, or if you plan to be a serious investor, you must learn to deal with emotions. At times you'll have anger, fear, disappointment, and many more challenging feelings. Let them go. Focus on the things that make you happy, the good experiences you have, and the blessings you've realized. Then you'll be in a much more powerful position to find the next great deal -- and if you stay with it long enough you'll get a few home runs along the way. Furthermore, you'll be able to capitalize on the opportunity as your mind will be clear and you'll be optimistic thus allowing you to operate in a much more effective way.
Go get 'em!
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Copyright © 2007 by Ron D. Pate. All rights reserved.