The longer I have been in the business, the longer my, if only list gets.
- If only I came up the $500 the agent told me and bought that property.
- If only I trusted my gut and bought more rentals.
- If only I kept that property instead of selling it.
Right now, you’d look like a genius pretty much buying anything in the low end of the market in 2009, prices are up 25% here in Southern California. That being said, I think regrets are a terrible thing in this business. You’re always going to make decisions you regret, but that is the nature of this business. No one in this business has a crystal ball and even if you have all the numbers in-front of you the government can hop in and throw a game changer in at any time.
Here is what I try to remind myself:
Can you make it cash-flow? Really truly cash-flow after all expenses? Do you like the neighborhood? Would I be okay if I owned this property in 10 years? Can I find qualified persons willing to rent this property? If you can answer yes to these questions you are not going to make any big mistakes. Even if you do, you should be able to cash-flow or break-even while you deal with your mistake.
For retail flips if you buy using the right comps (within 3 months that are truly similar, sq footage, lot size and year built) at a discount 65-70% of TRUE market less accurate repairs you have a lot of protection. You should have a 15% profit margin cushion and remember the market dropping 2% a month is substantial. Some properties will have unforeseen expenses, but if you specialize in buying right a lot will go wrong for you to lose money. You should factor in what the market will be doing for the next 3-5 months and that’s it. If the property can cash-flow as a rental you are protected, you have even more protection and a good Plan B.
After that, if you made a wrong decision 6 months ago, or missed a property forget about it. The decision seemed right at the time. With the ever changing market you will make a lot of wrong decisions… so get used to it!
My last comment for the night is, the best time to start acting is RIGHT NOW! You will always regret what you never did.