Over the next week or so I will attempt to explain how to lose a million dollars (or more) in real estate. I’m certain there are more than 5 ways to do it. I’m also sure that others have lost a million more gloriously. But, after going through the experience myself I came up with this list:
- Begin with the beginning in mind.
- Be a novice in your market.
- Invest for appreciation, not cash flow.
- Treat your business like a hobby.
- Give nothing away for free.
Many so-called real estate investors (I call them speculators) were wiped out in o7′-08′. But, I didn’t speculate and I still got creamed. How did it happen when I had strict buying criteria and wouldn’t touch a deal unless I could close it for 70 cents on the dollar? Remember the game musical chairs? Well, someone pushed pause on the IPod and I didn’t have a place to sit.
As a professional real estate investor since 2002 I’ve made my share of mistakes, which I will share with you. My hope is that you can learn from them and prosper. Remember what President John F. Kennedy once said, “only those who dare to fail greatly can ever achieve greatly.”