Re: How Not to Do It- - Posted by Lonnie
Posted by Lonnie on March 31, 1999 at 20:28:20:
Sorry to hear about your expensive “seminar”. It?s always sad to hear stories like yours, but if it?s any consolation, every successful investor has made their share of costly mistakes. But rather than letting your mistakes turn you off from doing deals, look at it as a learning experience and look for the next deal. Mistakes are where we learn our most valuable lessons.
I?ve had the same thing happen to me more than I care to tell. And I don?t really know how to protect yourself against every person you do business with, unless you simply stopping doing business. And that?s certainly not the answer. I?m sure I don?t have to tell you not to do business with someone you don?t really know and trust. But even then, you will get burned from time to time. I once partnered a MH deal with a man in NC. This was a man I had known for years and who had one of the best reputations of anyone I had ever known.
In this case, like you, I put up the money to buy a MH. The home was placed in his park, he kept it rented, and we split the profits. For several years, everything was just as we agreed. My checks were always there on time. Then for some unexplainable and still unknown reason, he did 180 turn. He stopped paying his investors, wouldn?t answer the phone and turned into a thief and a liar. And all the time he was still collecting payments from his tenants, but he just wouldn?t pay anyone.
Fortunately, I came out all right because at the time we did the deal, I had the title in my name and I held the title. When I made plans to have the home pulled out of his park, he paid me up, and bought me out.
Frankly, I?ve never liked partnerships, and what few I?ve been involved in, turned out bad. So I don?t do any more. If I can?t do the deal without a partner, I don?t do it. So how do you protect yourself in a partnership? I wish I could give you a fool-proof plan, but I can?t. But I will give you a few suggestions that I?ve learned over the years.
If the deal requires me to put up my money, then I maintain complete control and make the decisions. If the other party wants control, they put up their money.
Always do your “due diligence”. Check and verify everything you?re told, BEFORE you write the check. That?s why I don?t do deals more than 30-60 minutes from my house. I can check everything before I do the deal, and if I should have a problem, I can be on top of it quickly. If it?s a 1,000 miles away, I either have to go there, or find someone I trust to handle the problem for me. I don?t like either choice.
Don?t get greedy, or to lazy, to take care of your business. Greed is what causes most people to get burned and lose their shirts. And I?ve been guilty of that, also.
Regardless of what the fancy calculators and computer programs tell you, your gut feeling is often your best indicator of what you should, or should not do. Looking back, I can see that most of my mistakes happened as a result of going against my gut feeling.
Don?t look for business partners on the Internet There?s an old story I often tell. Two men went into a partnership. One had the money, the other had the experience. After a short time, the one with the experience had the money, and the one with the money had the experience.
Rene, I hope you can salvage something out of your bad deal, but more importantly, I hope you will learn that making a mistake it?s the worst thing that will happen. In my opinion, the worst mistake people make is to do nothing. Now, go do a good deal and report back to us when you?ve done it…
Best wishes for a great future,