Real Estate Mistakes

“Yes,” said the participants on the “Real Estate Mistakes” panel, “I’ve made mistakes investing in real estate.”  Members and guests at the July meeting of the TREIA North Rehab sub-group at Perkins Restaurant got a chance to listen and learn from these experienced investors.

Tiffany Elder, panel participant, is a Board Member and Broker/Owner of Paradigm Properties.  Tiffany is also a general contractor who loves historic restorations.  If you’re got a partner on a deal, Tiffany says to be sure to write up a one page agreement between the parties that explains each partner’s responsibilities, payouts, contingencies, etc.  Use simple language that explains it all.  You might be working with your partner’s estate, so spell it out so that everyone knows.  And, always plan for contingencies in your rehabs since there’s always something that goes wrong.

Cynthia LaChapelle, the next participant, is a Board Member and owner of LaChapelle Properties as well as a rehabber and landlord.  Cynthia says she “cheats” – she learns from other people’s mistakes and tries to avoid making them.  Cynthia gave us a list of her “Top 8 Rules,” which included:

• Never drive a Lexus to meet a contractor for a price – unless you like to pay big time.
• Check location within a location to avoid backing up to a highway, steep driveways, etc. in an otherwise good area.
• Overestimate repairs and underestimate the end value to keep the surprises from becoming disasters.

Catherine Edwards, another panelist, has been a landlord for over six years and a rehabber.  Catherine manages her own properties and has been through several tenants.  She says to stick to your criteria for selecting and managing tenants, no matter what.  Don’t be swayed by sad tales or simple excuses.  When she expands her portfolio, she’ll be looking for a property manager.

Jan Wynn, the final panelist, is a Board Member and Owner/Broker of Gateway Realty as well as an experienced rehabber.  Jan says to pay attention to the timing in the market so that you’re buying and selling at the right time, not caught up in the market frenzy.  And, don’t get all emotional about the property – make it neat and presentable and avoid those “oh, wouldn’t it look great if …” feelings about your rehab project.  It’s not your personal place, so don’t redecorate it.

Bottom line comment from the panel:  get educated and then get more education.