Back to the Drawing Board

Funny how we can convince ourselves we’re proficient at something we’ve really just begun. Our first investment property is, thus far, a relative success. More importantly, we’ve learned much – about making money on the buy, closing costs, land transfer taxes, the subdivision process, property management and more. Armed with this new and wonderful knowledge I’m ready to take on the world and buy 3 properties in the next 2 months and generate some immediate cash flow.

Yeah right.

The first 5-plex I offer on, I run the deal by an experienced investor friend of mine whose first reply is “oooh, I don’t think you want to do that.” He fired questions at the deal I hadn’t even contemplated and informed me that the neighborhood would likely yield gang members for tenants. “That’s just part of due diligence” he said.

Oops.

So I picked my burst bubble off the floor, and slinked back to square one to conduct all the initial research that will guide an educated decision. Vacancy rates, neighborhood stats, market comparables, rules and guidelines for multi-family units, and whatever else I don’t yet know.

While I dislike being sent back to the drawing board and much prefer to plunge headlong into the glorious fray, I must admit that it is humbling to realize that this will likely happen repeatedly. As I learn more, adventure into new markets and types of real estate, I’ll be required to learn – to start back at the beginning. I don’t like starting over, but back at t the drawing board though is where I find patience, humility, and the knowledge that will guide what will hopefully be wise decisions.