STRATEGY
PROCESS IMPROVEMENT
Recovering from Bad Investments WHAT TO DO WHEN A DEAL GOES IN THE WRONG DIRECTION
by Michael Jordan
• Neglecting due diligence • Underestimating market conditions Whether you have overlooked
or you’ll end up with a property you spent so much on, but no one wants to rent it. Take a step back and reflect on what went wrong with the investment. Be honest with yourself and take note of every step you took throughout the process. It helps to understand any maintenance and rehab costs that may come your way. Whatever niche you decide to invest in, you should have a keen understanding of the current housing market as well. Any areas of your process that need improvement should be strengthened to ensure mistakes won’t happen on your next investment. MAKEANACTION PLAN Asking yourself the right questions can lay the groundwork for your plan. Is the property taking too much of my funds to maintain it? Is the rent too high or too low?
eal estate takes a lot of patience and understanding in order to make good judgments. However, there are times that investments can inevitably turn sour, especially for those who do not have enough experience or for investors who don’t receive proper guidance from mentors. If you have been in the situation where a deal has gone bad, how can you bounce back and learn to not repeat the same mistake? What does a bad investment deal look like? The answer might be subjective, but these practices have a higher probability of ending in a poor investment: • Rushing to purchase a property and not having a plan • Refusing to work with a team of real estate professionals • Overpaying on the investment and losing profit by the end R
some important investment mistakes or fell back on a couple of setbacks, there are steps to help you recover.
REWINDAND REFLECT It is only reasonable to aim for the highest return on your investment, but there are times when things don’t go as planned. Renting it out can be a lucrative venture when making a profit from bad investment properties. At least that way the property can still generate income and pay for itself in the long run. However, the overall upkeep and maintenance can drain your funds if not managed carefully. Let’s not forget that you need to make the rental unit as habitable as possible
66 | think realty magazine :: july 2020
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