Being an investor takes a certain mindset to see past the learning curve and empower ourselves with the knowledge that will grow into the future we want to create for ourselves. If you want to get good at investing in real estate, you’re going to have to get used to the fact that there will be a few hard lessons along the way. As an experiment, I used a particular hard money lender to fund a rehab project in Bremerton, WA.
This particular deal could have had a better outcome had there been more favorable financing in place. However, using hard money for this particular rehab deal was an experiment. I had been hearing good and bad things about using hard money and decided to try it out on this deal, so with hard money I purchased a single-family property from HUD.
Since I was buying the house as-is, I thought I might save some money on the home inspection by not ordering one since I purchased the house at .50 on the dollar. However, It was a mistake. Even at .50 on the dollar, I still paid too much. Had I seen an inspection during the inspection period, I would have adjusted my offer to include the cost of waterproofing the basement, installing a french drain, and repairing the deck and garage. Seller would have balked, and Buyer would have walked.
Old Wisdom says that experience teaches best, and what doesn’t kill you makes you stronger. I can agree with this wholeheartedly, because I learned two things from this deal:
1. ALWAYS get an inspection – even if you think you’re getting a steal of a deal, ALL repairs must be accounted for before the inspection period expires
2. NEVER use 150-day hard money financing for rehab deals.
By the way, here is a virtual tour of the property I rehabbed:
Merry Christmas, Happy Holidays, and a Happy New Year to all!