I f***ed up by not buying this house (the one that got away)

And here I am. I would have been able to either buy it at ninety-six thousand dollars and get free insurance money to fix it up, or I could renegotiate the price, taking it as is, fix it up myself, and probably made, right there, just easily, just right there probably.

But what's up you guys? It's Brand here. So, really quick, before I get into this one, we're very close to hitting 10,000 people on Instagram, so we just need a few more. If you guys want to show some support, feel free to add me on Instagram. I post pretty much daily, so if you want to be a part of that, show your support, feel free to add me there.

Now, looking back over my career, it'll be almost 10 years now in May. I have very few regrets. Almost everything I've done has worked out amazingly well. I don't really look back and think, “I should have done this," or "I should have done that differently." This is one of those things where I look back and I'm just thinking, this is the one that got away. I should have bought this one. This is the one thing that I look back on and wish I had done, and I didn't do it. I stopped by not getting this place.

I'm gonna share this entire story with you guys and how you can avoid making the same mistake that I did, and a lot of this dates back to 2011-2012. Now, if you watch some of my other videos, you know that back then I ended up buying 3 properties, and that wiped me out financially. When I was done buying these 3 properties and renovating them, I pretty much had no money left over. So, I was coming out from that time where I didn't have a lot of money to spare and stuff like that.

But thankfully, I had a few more deals lined up at the time that gave me a little bit more money, and it was at that time that I was starting to think, maybe I should just go and buy a fourth property. Now, keep in mind this is 2012. The properties were still really dirt cheap, but the problem was that the area that I was buying in, already, which is in San Bernardino, California, things were really being bought up and I felt that it was a lot more competitive, and I wasn't gonna get the same deal that they just did for the last three. So, I started looking, believe it or not, out-of-state, and I kind of identified Las Vegas as a place that I can see myself investing.

The reason why I picked Las Vegas is because my friends and I would go up there pretty much every month. Sometimes maybe even twice a month, and we'd go there just to gamble. We're not the types that would go up there and just go like rage and party for the entire weekend. We would take it really seriously, and we would go there and play like craps and baccarat and blackjack. We would just go there and get like amazing free comps, and it was fun.

But because of going there and back so often, I felt somewhat familiar with the market, and I really felt that Vegas was a market that was undervalued, and that anything by the strip was going to end up doing really well. So, I reached out to a real estate agent out there who ended up having this property that was off market, and it was a short sale.

So, for anybody out there who's not aware, what a short sale is basically a deal where the owner bought it for way more than the house is worth, they couldn't make the payments on it, and they just give it back to the bank and let it go into foreclosure. What a short sale does is the owner can try to pass off the loss to the bank and then just have somebody else buy the property. Basically, the bank will just absorb that hit, and that was why a lot of the banks ended up getting bailed out.

This is a property that was two bedrooms, one of the hot bathrooms, I think about 1,200 square feet that originally sold in 2004 for two hundred and seventeen thousand dollars. Now, in 2012, they wanted it at sixty-nine thousand dollars. Now, hold off on your sixty-nine jokes here, but sixty-nine thousand dollars is how much they wanted, and for me, I was just like, you know what? This is perfect. I wanted this house really badly for sixty-nine thousand dollars.

So, I went ahead, I wrote an offer, I got the offer accepted. The way it works with short sales is that you get the offer accepted and then they send it to the bank. Then it's up to the bank to decide how much they want for the property and if they'll sell it. The seller also has to meet some requirements to show that they don't have millions of dollars and they're just letting it go off to the bank just to save themselves, you know, so they don't lose money on it.

So, they do some investigation on the seller, the property, the market, and then it goes through an entire process. Now for short sales, it could take anywhere from three months to sometimes over a year to get approved by the banks. So, I knew that if I got this offer accepted in 2012, realistically it was probably gonna be about six to twelve months in order for me to actually, you know, buy the property and get approved by the bank. So, I was totally cool with this.

Got the offer accepted, sixty-nine thousand dollars, and then all I did was follow up with the real estate agent about once a month. Every month, I'd say, “Hey, what's up man? How's it going? Any update with this?” and he'd get back to me and say, “No update. Sitting with the bank. It's this far in and we got a little bit more to go.” Fine. I did that every single month for an entire year from 2012 to 2013.

So now we're in September of 2013. The bank comes back and says, “Congratulations! We're accepting your offer.” However, in the span of one year from 2012 to 2013, the market went up in price. So, even though when you wrote this offer initially the house was worth sixty-nine thousand dollars, we estimate that because of the inventory out there and we estimate that because the market has gone up dramatically, we now want ninety-six thousand dollars for this house.

Ninety-six thousand dollars. At the time, I was just like, this is not cool. I wanted to buy this house a year ago. The whole point of this was because I felt that market was gonna go up to this price. Now I'm paying what I felt at the time I’m paying almost what it's worth market value-wise, when the whole point of this was to buy it at sixty-nine thousand dollars when the market was really suffering.

I started to do some research on this, and I was right. I mean, there are very few properties that were under a hundred thousand dollars at this point in Las Vegas. But at the same time, I just got a little arrogant, and I started to get a bit cocky with this because I'm like, I'm an expert in investing in these low-cost real estate deals, and I know everything. I'm not gonna pay market value for this house, and realistically the house was probably worth about a hundred and five thousand dollars at the time, maybe on the high end a hundred and ten thousand dollars, and on the low end probably about ninety-six, which is basically what I was paying.

So, worst-case scenario, I'm paying the low end of what this house is worth, and the best-case scenario, I would make about sixteen thousand dollars in equity on this deal. But I just got arrogant and I'm like, you know what? I'm not going to pay ninety-six thousand dollars for this house. So, what I did, I called back the real estate agent and I said, “Let's prepare a counter for eighty-eight thousand dollars,” and this way I felt like at least I'm getting a pretty good deal and I could buy the property a little bit less than its lowest value.

In my opinion, honestly, I was just upset that I couldn't get the offer accepted at like sixty-nine grand. I think that's what it really came down to because that was what it was worth back then, and I just kept thinking like this is basically just costing me another like twenty-something thousand dollars just for waiting a year, and I didn't want to pay an extra twenty-something thousand dollars.

So, I went back at eighty-eight thousand dollars, and then the bank came back a week later and said, “Graham, thank you very much for your eighty-eight thousand dollars, but basically, it's ninety-six thousand dollars or get the out of contract. We're gonna sell it to somebody else.” At that point, again my arrogance took over, and I'm just like, you know what? This isn't even worth it. I wanted my eighty-eight thousand dollars.

You know, I offered sixty-nine thousand, let it go, let it go. That was a big mistake, looking back. So then, once it cancelled, of course it ended up going to someone else who's very excited and glad to pay the ninety-six thousand dollars. So, I figured at that point, you know what? This does not have that much upside in it. Whatever, going to someone else, no big deal.

But I still followed up with the real estate agents just to find out like, okay, just in case, at least I kind of want the option to jump back in because I'm noticing that, wait a second, I did actually kind of got by not doing this. Values are really going up like way faster than what I thought, even in the time where I cancelled.

So, like a few weeks later, I mean, really things just like all of a sudden started picking up. What ended up happening about one month later, basically the new buyer came in and was about to close. Two days before closing on this vacant house, there was a major flood in the property. Major. Now my plan originally was to go and gut the property anyway, so I didn't really care about any sort of flood.

But the property flooded, and the new buyer ended up cancelling the deal because of this flood. Now, if I were in contract and the property flooded, this would have been the perfect opportunity for me to renegotiate again with the bank and say, now it's gonna cost me an extra twenty thousand dollars to fix this up, which, you know, I can do it for a lot less, and then renegotiate back to probably the sixty-nine thousand dollar price they could have gotten from the very beginning had this property just flooded while I was under contract with this.

Because banks don't want properties that are flooded and have potential liability issues, especially when you're already in contract to close. This would have been a perfect opportunity. Also, assuming, let's say I closed on the property already and it flooded the next day, boom, insurance kicks in. I could basically get an entirely renovated property paid for by insurance because of this flood, and that would have made a ton of money without me spending almost anything renovating this property, even though I was planning to do it anyway. The flood is just a good excuse to either ask for a credit or get money from insurance for damage that ended up coming up.

So, this property ended up flooding and the buyer who was in contract didn't have the money to do this, and they didn't want to undertake the project. That second buyer ended up backing out, and when I heard this I was just like, this is perfect! I want in on this deal. But, unfortunately, what ended up happening was that the bank realized the market's still going up. What they wanted to do, they didn't want to sell the house with water damage and potential mold and liability, and there was just a lot going on.

So, the bank says, “We're not gonna sell this anymore as a short sale. What we're gonna do is we're gonna take it back. We can claim ownership of the property, and we're gonna do what's called an REO,” which stands for Real Estate Owned. Basically, what this is, these are bank-owned properties. They go in, they put little light touches, they basically just fix it up, do really minor stuff to try to sell it really quickly for about market value.

They ended up going in just cleaning up the damage; I have no idea how much they spent, and then they ended up selling the house almost a year later, or maybe it was almost two years later at this point, for a hundred and fifteen thousand dollars. The bank just took forever. It took three years for this property to go from start to finish.

So, anyway, I saw that home sell for a hundred and fifteen thousand dollars, and I figured, you know what? I'm kind of over it. I wanted to spend more time investing in West Los Angeles, which is where I'm living now. But what makes it even worse is that just three months later, after that person bought it for a hundred and fifteen thousand dollars—spent almost no money additionally to kind of fix it up—they sold it for a hundred and fifty-five thousand dollars just three months later for doing almost zero work on the property.

And here I am. I would have been able to either buy it in ninety-six thousand dollars and get free insurance money to fix it up or I could have renegotiated the price, taking it as is, fix it up myself, and probably made, right there, just easily, just right there probably about eighty thousand dollars in profit just from doing some really minimal work in Las Vegas.

If it doesn't get much worse than that, it does now because probably the value of that home is probably worth a little bit over two hundred thousand dollars at this point. Two hundred thousand dollars! So, I could have doubled my money just by holding on to this property by doing absolutely almost nothing on this property besides maybe a few weeks' worth of work on it. I doubled my money on that in just a few years.

And this is, by the way, a home that would probably rent for about nine hundred dollars a month at the time, which we all know, if you're getting nine hundred dollars a month for maybe a seventy-five thousand dollar total investment, that is a very good deal. A lot of people just weren't buying properties at this time, so instead, they ended up renting, and the rental market ended up surging because of this, and these were deals that were just really common at this time.

Looking back right now, this same house would probably be renting for about thirteen to maybe fifteen hundred dollars a month that I could have bought around ninety-something thousand dollars. Because I offered eight thousand dollars less than I should have just to buy the property, I was too cheap. I was too frugal to try to save eight thousand dollars because I let my ego get in the way and think that like this is it, I know it all, and I'm not gonna pay ninety-six thousand dollars for this house.

I made a huge mistake. That eight thousand dollars ended up costing me well over a hundred thousand dollars in profit just because I didn't want to spend that eight thousand dollars. Not to mention all the additional rental income I would have gotten at the time. I mean, we're probably talking like an extra thirty thousand dollars in rental income that I would have made at the same time.

So easily, this is a hundred and thirty thousand dollar loss because I didn't want to spend eight thousand dollars more. And the moral of the story here is that sometimes you have to look at things objectively and not let your own pride or ego get in the way and think that like I'm this amazing real estate investor and I only get the best deals and I'm not gonna buy something unless it's like, you know, that I'm getting the best deal possible.

That's what really ended up getting in the way here. Had I looked objectively at this deal and just said, you know what? Every other property is selling for over a hundred thousand dollars. I'm getting this one a little bit less. The long-term picture is really what I'm going for anyway. I'm not in this just to try to save eight thousand dollars on a deal because I try to get the best deal possible.

If I was not that type of investor back then, I would have bought the deal. I would have overlooked it. I still would have had an amazing property that would have doubled in value. I would have made over one hundred and thirty thousand dollars. I like how they just bought that. That's basically the free Lamborghini that, you know, I'm talking so much about buying. You know, that's the free Lamborghini right there. I just bought that property, but I didn't.

So again, for all of you watching this, if you ever want to become a real estate investor or really invest in anything, do your best to look at things objectively and try not to put your ego in the way or your pride in the way and think that you're better than you actually are. Because I wasn't. I'm not this amazing investor. Sometimes I just have to look at things objectively and not let myself get in the way of myself because that was really what ended up happening.

I got in the way of my own deal just to try to save eight thousand dollars. Don't do this, and this is the one property, and I've dealt with, then I should have got—the one property that got away from me. So, for all of you watching, don't make the same mistake as me. Look at the long-term picture of the deal.

So, as always, you guys, thank you so much for watching. I really appreciate it. If you watched it all the way through and you haven't already subscribed yet, make sure to smash that subscribe button. Smash that notification bell so YouTube notifies you anytime I upload a video. And also, if you like it, make sure to hit the like button. It really does mean a lot to show your support. Like this, also feel free to add me on Snapchat and Instagram. I post there pretty much daily, so if you want to be a part of it there, feel free to add me there.

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