Don’t Put Yourself In the Quicksand
I’ve been seeing an issue recently with some of my investing students: they’re bringing deals to me to look over as we work together, and many of these deals have no way of making money. These students are just desperate to either put a deal in their pocket, or more often, they feel deeply for the seller and want to help them.
The problem is, even though what we do as investors is a service-based business, we can’t sacrifice our own livelihood to help every seller we come across.
I’ve been seeing an issue recently with some of my investing students: they’re bringing deals to me to look over as we work together, and many of these deals have no way of making money. These students are just desperate to either put a deal in their pocket, or more often, they feel deeply for the seller and want to help them. The problem is, even though what we do as investors is a service-based business, we can’t sacrifice our own livelihood to help every seller we come across.
Years ago, I found a property and the sellers were in financial trouble. I bought the property from the real estate company that owned it and closed in their own office. We renovated the property and made it nice and got a new tenant in there. Three years later, my tenant tripped and fell on the property, and when I called the insurance company to process their claim, I was informed that I wasn’t the owner of the property. The real estate company I had purchased the property from never recorded the deed! That resulted in a lengthy lawsuit and deposition, which I don’t have to tell you was less than fun.
The point is, sometimes we want to help people, but if it hurts our business, then we can’t help other sellers. We’re not there to join or replace them in the quicksand, we’re there to help them out if we can or walk away. We’re not miracle-workers; we’re driven by profit and we get that profit by helping people, but not at our own expense.
In order to know what constitutes a good deal, you can’t use the PFA method, or the “Plucked from Air” strategy of deciding your numbers. You need to know your numbers! Without them, you will end up in the quicksand and you’ll be learning a lesson you’ll pay dearly for.
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Also visit LarryHarbolt.com for all your real estate investing education needs. There you can find my online courses which contain all of my investing formulas and worksheets so you’re not putting yourself in the quicksand.
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