I must warn you…
Many investors will take the ostrich approach to what I’m about to share, and bury their heads in the sand, hoping that the problem will go away.
I urge you not to do this, because…
This is what clouds your judgement and makes it difficult for you to recognise a potential property deal – or an investment you own – is a sinking ship.
This is the difference between those who go on to build property portfolios, and those who don’t.
This is what causes you to buy investments that take you further away from your goals, and can be detrimental to your success (so it’s vital that you address the problem earlier rather than later).
And this is the key to success or failure in all areas of property investing…
It all boils down to one key factor:
Your Ability to Make Clear, Timely Decisions Free From Emotional Hang-Ups
And while it sounds simple enough, it’s a lot easier said than done, especially if you’re new to the game.
Let me give you an example from my own experience:
I once came across a piece of land that was in the process of being developed. The vendor offered for settlement of the land to occur when the units were sold and settled with the buyers.
I was very excited at being able to develop 15 units in a fantastic location, in an up and coming area with huge potential.
The vendor was a lovely old man who wanted to work with me to make the deal work. I was very attached to this deal and I also knew that the potential profit was exceptional, provided all the units were sold at the required selling price.
I worked hard to conduct all the necessary due diligence, even going as far as to commission an architect to review the site and speaking to the council on several occasions.
The location was perfect for the development I had in mind. With all that support, it made it hard to let go of this sinking ship.
So what was the problem?
The selling price I needed to achieve on each unit could not be validated.
Real estate agents in the area could not provide comparable sales equivalent to what would be built and therefore the selling price we were using was “estimated”.
As a result, the lack of relevant data caused us to let go of this sinking ship.
As hard as it was to turn our backs on this development deal, particularly with so much potential profit to be made, it proved to be the best decision for us at the time.
Looking back, it would have been an emotional decision to continue on with it and financially, we would have suffered had we proceeded.
You may have found yourself in a similar situation, where you’ve invested so much in a potential investment that you continue to explore every possible option to make it work but no matter what you do, you can’t quite get it across the line.
In these situations you have to force yourself to accept that this deal hasn’t worked, so it’s time to move on.
You can then refocus your energies on another deal that does stack up and that will move you forward on your investment journey.
But how can you tell if you’re about to buy a ‘dud’ property, or if you’ve already bought one?
You need a checklist.
And you’ll find one on page 27 of my ‘Red Book.’