War Stories - Posted by Randy_OH

Posted by LK Lorton on March 17, 2002 at 22:09:57:

Good post, thanks for sharing that with us Phil.

War Stories - Posted by Randy_OH

Posted by Randy_OH on March 16, 2002 at 16:13:26:

Experienced Investors:

CREI involves risk. That point is mentioned frequently on this board. I think it would be interesting and beneficial to both experienced and inexperienced investors to hear some of your war stories. Please tell us about one (or more) of your major blow-ups. What caused the problem, how did you resolve it, what was the damage and what lessons can we learn from it? It is sometimes said that you learn more from your mistakes than from your successes. So I think this could be a very educational thread if we can get some participation.

Thanks in advance,

Re: War Stories - Posted by Ben (NJ)

Posted by Ben (NJ) on March 18, 2002 at 07:19:03:

This isn’t really a lesson but just a funny anecdote.
Last year I foreclosed on an abandoned two-family house where the owners had died. We discovered that a squatter had been living on one side but that the squatter had the balls to have RENTED out the other side! What an entreprenuer!

Re: War Stories - Posted by RicAtl

Posted by RicAtl on March 16, 2002 at 19:04:52:

This is a good posting. I would like to hear more from other experience investors like Joe Kaiser, who I respect highly. I also have one of Joe?s courses. ( Totally Dominate Your Foreclosure Marketplace)very good material (It takes a smart investor to learn from other investors mistakes.)

Re: War Stories - Posted by phil fernandez

Posted by phil fernandez on March 16, 2002 at 16:39:38:

Two stories come to mind. The first and worst was not all that long ago in the mid 90’s. I had bought a nice late model mobile home at auction. Paid the cash and couldn’t wait to put it on the lot that I thought was all permitted for a mobile. Poured the slab. $2,000, brought the mobile down for another $1,000, hooked up the electricity and plumbing in from the street another $1,500. And all was well. Geez that mobile looked good from the street. I was ready to sell the mobile land package for a nice profit.

WRONG. The neighbor apealed the zoning permit and it went from the city zoning board to the Vermont Environmental Court to the Vermont Supreme Court where we finaly won. But it took over two years. In the meantime I’m paying property taxes, insurance and have my cash tied up. BTW I only had an option on the lot with a flimsy one page written agreement with the owner of the lot.

I got sick of waiting for the Supreme Court to act on the neighbors law suit so I advertized for just the mobile home for sale and as an inducement for a sale I said I’d include the move. Now I’m paying for the second move of this mobile. Well I got a buyer for cash and arranged the move. Less than a week later the Supreme Court decision comes back after a two year wait in my favor. Too late for me. Mobile home is gone including my profit in fact I lost about $6,000 worth of repairs cause the owner of the lot all of a sudden saw that the improvements that I paid for were there and our option agreement had run out.

What did I learn from the eperience.

1./ No matter how much experience that you have, you better not get distracted with too many deals and trust your seller with lousy documentation.

2./ Do not trust anyones word. The seller said he had all permits.

3./ Don’t pour your money into a deal unless you have the deed.

4./ Even though I checked with the city zoning administrator who told me yes the permit is in place. Anyone can sue you and prolong the situation. Once that happened, the city officials didn’t know me.

So there you have it. My other mess up will be left for another day.