As a leading real estate investing mentor, I am called on to respond to a variety of "emergencies." Experience teaches us that not everything is a real emergency. For example, issues arise in a typical escrow that can delay a closing indefinitely.
Let me tell you about a recent disappointment that caused me to repeatedly change my plans. This is an important deal and the seller is just as motivated to sell as I am to buy it. The renovation is in a neighborhood that is in high demand. I had established rapport with the seller and everything seemed in place.
The seller is a relative who has power of attorney for a family member who is incapacitated. Unfortunately, the usual power of attorney document is not adequate for transactions in this State. The State requires a specific document stating the address of the property that is being sold. Now the seller must go to the family member who actually holds title and get them to sign the new document. Well, guess what! They don’t want to sign.
Now the relative with whom I am working is very sharp and she will make it happen one way or the other. The point is that things come up that can delay or even kill an escrow. What are you going to do when this happens?
I always tell my students to be prepared for the unexpected. One thing I often stress is to “stuff the pipeline” with lots pf prospects. This way, when a deal goes south, there are others in the pipeline to keep your momentum.
How would you feel if you lost your ONLY deal? Devastated. Right? Well, when you have several prospects lined up the disappointment of a lost transaction is minimized greatly.
I was really ready to get my trades on this property as soon as we closed and everything stopped. Fortunately, I had another rehab in the wings so I could keep my crews busy.
So what is the moral of this story? Think big. Don’t focus too hard on one deal. If a deal seems to be either delaying or perhaps the profit margin really isn’t there, stop spending time with it and move on. There are plenty of properties with motivated sellers out there. My students are constantly amazed when I spend 1 on 1 time with them and they see how much there really is out there.
The truth is that, if you are new to the real estate investing business, things will be MUCH DIFFERENT once you have successfully closed your first deal. Your self-confidence will soar and your effectiveness will grow. Once In get my students past that first deal they gain renewed vigor and each subsequent transaction gets easier.
Do you have any horror stories of a delayed closing? We'd like to hear. Let me share them with my audience.