Whether you are an experienced investor or you’re new on the scene, the fact of the matter is: mistakes happen. You’re only human, and we are unfortunately prone to mistakes, but experience remains to be the best teacher.
Trying and failing is how you learn not to make the same mistake twice. But, even though you’ve learned your lesson, some mistakes have staying power and can quite literally keep you up at night.
In the spirit of the Halloween season, I thought I’d ask some investors to share their most “terrifying” investment mistakes. Hopefully, these hair-raising tales won’t cause you to sleep with your light on, but just maybe they’ll give you the foresight to spare you some haunting regret.
Investment Mistakes that Keep Us Up At Night.
It was a dark and stormy night when…
“I jumped into a deal without double-checking the numbers.”
“Ok, so it was my first investment and I was naive at the time, but I broke the number one rule when it comes to investment: I didn’t make sure my property had solid numbers. I jumped on the first deal I found, and didn’t even do any research first. It seemed like a good deal at the time.
I’m embarrassed to admit it, but I borrowed at a ridiculously high interest rate with a huge monthly payment. I didn’t do the math and I thought I’d get rich quick, and although it started off great, I ended up with a negative cash flow after the market’s rental rate went lower than I could manage. I persevered, though. Eventually the area economy picked up, and I was able to make it though. I really can’t think back on how stupid of a mistake that was, it makes me cringe.
…just making sure. You’re not using my real name in this, right?”
By the eerie light of the full moon…
“I underestimated my costs, and blew through my money.”
“Some upgrades seem great on paper, but that’s about the extend of it. I blew through my budget thinking I should add the newest, trendy updates to my property, while also underestimating the costs of the actual repairs I needed. So, pretty much, my big, fancy ideas and updates meant absolutely nothing in the end. I ran out of money.”
The lights flickered ominously when suddenly….
“I realized my ‘reputable’ contractor was Dr. Jekyll & Mr. Hyde.”
“I had a couple of meetings with a contractor who seemed like a great, honest, and hardworking guy, so I hired him. He changed pretty quickly after that, and started acting really shady. He kept postponing projects, claiming he needed more time, different materials, money, etc.
These were obvious excuses, and I was suspicious. It finally come to light that we was intentionally buying discounted and low-quality materials and overcharging me so he could pocket the extra money to buy drugs…that he was using on-site.”
I pushed open the old, creaky door to the mansion, when suddenly…
“I realized investing in an old home costs a lot more than you expect.”
“Restoring a historical house has always been a dream of mine, and I was so excited to finally find a great deal on one. My mistake was completely underestimating the amount of repairs and constantmaintenance and older home needs. It took us a long time to finish the rehab, and it was a very expensive process. We decided to use it as a rental, but it ended up eating away all of our profit with just maintenance!”
Don’t be scared, Sherman Bridge is on your side!
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