8) Learning from Real Estate Fails & the Pitfalls of Partnerships

Real Estate Investing with House Money

Real Estate Is Easy Interview

Lauren interviewed project manager, Rob Wittie, of Oasis Project Management and Oasis Custom Homes in St. Petersburg, Florida. Rob did a large project for Lauren and her husband recently, so they have some stories! (Note: This interview was done in-person, so the audio is a little different than usual.) The two start the interview by explaining what a project manager does. Rob is passionate about bringing people’s visions to life. Lauren couldn’t help but ask about the labor shortage and reasons behind it. Rob gives advice about what to look for when looking at a property that will break the bank. And guess what? The best thing you can do is get a pro to come out and take a look. Rob triggers Lauren with some of the designs she doesn’t love. Lauren also forces Rob to speculate about which designs and features will date properties to this period. He reminds us all not to get emotionally involved with the properties and designs. And don’t forget to include some extra budget for contingencies and add-ons! Of course, Lauren had to ask about what happens when you go for the cheapest quote. Rob does cost plus pricing only. Finally, Rob answers the question: how do you make real estate easy? Interestingly, it comes down to mistakes.

Mortgage Minute: Jasmine answers the question: Why does a good credit score matter?

House Money Weekly

In this week’s House Money Weekly segment, your hosts talk about how to lose money in real estate (with the idea being you DON’T do them!). This is blog number 109. The easiest way to lose money in real estate is when you buy by trying to time the market. Tom shares some of his recent deals that haven’t worked out. Lauren considers mistakes tuition on life. Just because Tom (or any of us) purchases a dud, the thinking that led to that dud helped MUCH more than it hurt. A second way to lose money is by being too frugal. For example, listen to your mentors. Use their people. Lauren points out that being cheap is not the same as being frugal. Tom emphasizes that sometimes paying more makes the most sense, despite being The Frugal Gay. The third way to lose money is to aim too high when it comes to pricing properties for sale or rent. They get too stale. Alan has actually gotten into bidding wars for his rentals when pricing $100 below market.

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Teatime with Tom

Tom’s segment is about working with difficult partners. As people grow, this topic comes up a lot, especially if they don’t have money. Remember, you’re getting “business married” to these people. Alan mentions how much you learn about people BEFORE you do any deals with them. Your hosts take you behind the veil of the House Money Media partnership. Tom emphasized the importance of an up-front partnership agreement. He has 4 different partnerships and all of them are very different. Tom prefers partners with big-picture interest in the business, rather than nitty-gritty nit-picky items. In reality, you must ask yourself if a partnership is the best way to invest in real estate with no or low money down. Alan reminds us that if you don’t have the money, you’ll be doing a LOT of work. Lauren adds: there’s no free lunch. Would you invest with you?

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