If you invest in real estate long enough, you'll surely have deals you both regret doing, and regret NOT doing. Let's talk about one that I screwed up... and that I still regularly think about.
It was 2019. We contacted the seller of a 44-unit property in New Hampshire through a direct mail piece. The seller had owned it for 20 years and wanted to retire.
Low rents. Deferred maintenance. Motivated seller asking $55k per door.
We were thrilled to offer that price. The numbers worked beautifully.
But here's where we screwed up...
This was much larger than anything I'd done before. I'd bought plenty of 2-8 unit properties, but nothing this size. The earnest money was substantial, and my partner and I got spooked.
We refused to waive the financing contingency. We asked for a longer closing timeline than necessary.
Meanwhile, another buyer offered the same price but waived contingencies.
Guess who got the deal?
Here's what hurts most
That property is worth $160k+ per unit today. It more than tripled in value over six years.
We lost out on what would have been a $7+ million asset because we weren't willing to get aggressive on a deal we knew was solid.
The lesson that changed everything:
If you're extremely confident in your underwriting and the deal is above your current level, don't ask for the moon with contingencies. Get it under contract and solve the financing puzzle afterward.
We should have waived contingencies, secured the contract, then partnered with larger investors in our market who would have been happy to give us equity or take an assignment.
This was a solvable problem, which makes it more frustrating than losing to a higher offer.
The property was worth $75-80k per unit at the time - we had it at a steep discount but let fear paralyze us.
Bottom line:
When you're confident in the numbers, be willing to take calculated risks to secure the contract. You can always find partners or solutions once you control the deal.
That "expensive education" completely changed how I approach larger opportunities today.
Sometimes the most expensive lessons become the most valuable.