The One That Got Away

[Olly]

Hopefully we all learn by our mistakes, but I believe we can learn from other peoples mistakes as well.

I've seen in these posts vague references to a property that someone missed out on 'cos they didn't act quick enough or realise the potential of the property or some other reason, so thought it would be interesting to see the stories from people on "the one that got away".

Here's mine -

When I went looking for my first IP I was concentrating on 1 bedroom flats, which were going for between $58-70k in the area I was looking in. I was taken to see a 2 bedroom flat in the same price range in Cabramatta. It had a toilet that continually flushed, a hole punched in one of the doors, the last tenants had left in a hurry and left a mess and it generally had a 'dirty' feel to it. But other than that it had built ins and an internal laundry and reasonably good sized rooms.

At the time I was concentrating on something immediately liveable and didn't think of repairing or renoing anything - it just never entered my head. The price was $64k and I said no thanks. Without any haggling at all the RE agent immediately said "will you take it for $50k - and I said no! Can you believe it??

For less than $1000 I could have fixed the toilet, fixed the hole in the door, painted it and had the carpets cleaned. Rent at the time was about $120/week.

That flat is now worth about $180k and getting rent of about $165/week in just 5 years!!!

What an idiot I was!! And all because I didn't realise the possibilities. I was an inexperienced property investor then (still am really), but I have learnt to see beyond the obvious and not focus so narrowly.

So if you've decided on your "strategy" - great, but don't let it cloud your judgement on something else that may come up - keep your eyes peeled and mind open.

Cheers
Olly

 

[geoffw]

Hey, we all love fishing in this forum- so the story of the "one that got away" is never far from the surface.

About three years ago, I offered on a small block in Queanbeyan, the offer was accepted, and I had inspections. All was OK.

But the vendor withdrew.

No problems there- except for my inspection costs.

But the agent came back a little while later about a block in Queanbeyan. 20 units, 10 1BR, and 10 2BR. Cost $500K- no negotiation.

I could get halfway, and it was EXTREMELY tempting.

It was a derelict block. 8 units were occupied, and the others were almost unlettable.

But, with those 12 lettable units (fgorgetting about the squatters), IT WAS RETURNING 12.5%!

It would have cost another $250K to get up to scratch.

I could not do it by myself.

Potential Partner 1 was already overcommitted.

Potential Partner 2 was a R/E newbie. He was very interested, and could see the possibilities. His accountant's advice was positive. So we investigated- but at the last moment, his accountant told him to go into managed funds instead.

Potential Partner 3 was excited- he could see all the possibilities. We called the agent.

But we missed out by about one hour.

A Sydney investor bought it sight unseen.

Original cost price, $500K. Improvements, $250K. Resell then, $1.25M.

Resell now- probably $2M ++

A big fish which got away?

No.

It was frustrating not being able to get that deal.

But it was good to know that I did have good judgement, even if I did not have the numbers.

And it gave me a lot more confidence in myself to know that I could get the numbers right.

 

[Kristine..]

Geoff and Olly

It seems to me that we are sometimes given 'practice runs' with opportunities.

The deal which we don't act on, but put a lot of work into, may be frustrating at the time, but when the second 'deal of a lifetime' comes along a week / month / year later, we are familiar with the whole concept, and can then have the confidence to buy 'sight unseen'.

And of course this just doesn't relate to investment properties, but life in general.

I start my carpentry course tonight at TAFE. I enrolled for this three months ago, that course was full, and I was put in to this one.

What for? The path of Life has meandered along a bit since then, and it would seem unnecessary to do the course - right now.

But there will be other renovation opportunities, and I want to know how to safely use power tools, and I have had a shed in a box wanting construction for about eight weeks now, and still haven't cleaned the equipment from daughter's renovation, 'cos I have nowhere to put it once it's cleaned.

Having been becalmed for a while, all of a sudden the wind is in the sails again. (Water, water, everywhere, and all the boards did shrink: Water, water, everywhere, and not a drop to drink!)[Sorry, couldn't resist that even tho albatros are somewhat rare in these here parts!]

The 'one that got away' can sometimes be the most important deal because of the lesson inherent in that particular deal. After all, thousands of properties change hands each week. What makes one stand out when we are oblivious to the others?

Perhaps what is more important, is what deal did we then act on, because of that one missed opportunity?

Geoff, you have mentioned owning a block of flats. Would you have bought them, if you had not missed out on the other two blocks?

Olly, you have obviously bought subsequent 'renovator's opportunities', perhaps because looking back, what needed doing to the 'one that got away' really was well within your scope?

Hmmm. I feel a philosophical lecture coming on. Best to save it for the Melbourne Social Event on Saturday.

Cheers

Kristine

 

[handyandy]

Hi Olly

You must have been looking in Cabramatta at the same time that I was buying there. Sounds like this unit was on the Highway side of Cabramatta.

At times I had the same mind set as I was shown so manny units I was very selective as to the ones I bought.

This ended up being to my own detriment as I turned down a number of blocks which if I had simply bought to sell now would have meant that all my purchases would be debt free now.

The last one that 'got away' was a block I had my eye on for some time and had a realestate agent aproach the owner. In negotiations I was outbid by $15k a unit and ended up missing out. It was at this point I realised the Cabramatta market had moved from my buy point.

Cheers

 

[kissfan]

Hi Olly. Hindsight is a great thing huh. Probably, everyone on this forum has got a "geez, I should've bought that " story to tell, but as they say the deal of a lifetime comes along every minute,day,week,month or whenever so dont dwell on what could have been, instead, focus on what can be. I think that if you learn from a mistake then it was never a mistake in the first place.

All the best

Marty