JP here — Patrick and I are tag-teaming a powerful story for you.
So, Patrick was telling me about a deal where he was trying to close on a loan — it took way too long to close, and it was messy and super frustrating. And that got me thinking… there are a bunch of lessons to extract from that learning experience, from that mistake, from that failure.
Please know I am not trash talking the amazing P. Riddle — we often share our goof ups, mine included, to show you ways to avoid making the same errors, and that’s what we’re doing here. He and I are totes in this together.
So first, I’ll let Riddle share his story, then I’ll follow it up with some helpful, actionable thoughts.
Take it away, Patrick…
Thanks, JP.
Here goes: We applied for a loan on one of our investment properties at the beginning of November. As far as comps go, there was not much for our appraiser to go off of. The subject property was one of the biggest houses in the neighborhood and not much had sold in the past 6 months.
The appraisal ended up coming in at $145K.
Finally, at the end of December, we closed the loan — a month a half later. :/
If it weren’t for an appraisal review, we would have closed it in half the time. It can be frustrating when you think a loan is going to close by a certain day, and it takes several more weeks. Ugh.
So, a good question to ask any time something like this happens is: “What can we do so this doesn’t happen again?”
After discussing this with our mortgage broker, we decided to try a couple different things on our next deal.
- First, we made sure to tell our appraiser to be a little more conservative. An appraisal is just an opinion of value and has a range depending on who does it. We want to be on the lower end of that range now.
- We also asked the appraiser to include a detailed list of repairs that were done to the property. Lenders are leery when they see that a property was bought for $97K and someone is applying for a loan on that property for $145K… 3 months later. If a lender sees that the property needed a lot of work, there isn’t any reason for them to throw a red flag and do an appraisal review.
So yeah, this was certainly a tactical learning experience for us, and we wanted to share it all with you.
It’s not only taught us how to do this aspect of deals differently, but it also made us think about our mindset and how we approach challenges.
With that, I’ll send it back to JP…
Basically, I see this as a huge lesson to learn in life and in business… you will fail, you will make mistakes. It’s not a matter of if you will make a mistake in your REI endeavors or any endeavor in life. Because it will happen.
It’s about how you handle mistakes and what you let those mistakes mean to you…
See, mistakes are only failures if you give them that meaning.
BUT, if instead you choose to see every single mistake as an opportunity to learn something that helps you level up, you must take the time to sit with it and ask yourself the hard questions.
- What should I have done differently?
- What can I learn from this so that it doesn’t happen to me again next time?
- How can I level up from this?
- What can I extract from it?
See, this is a really important core value of mine and Patrick’s, reflected in this email — and we want to challenge everyone who’s reading these emails to assess for themselves:
Are your letting your mistakes and failures be blemishes on your record
or are you wearing them as proud scars?
Every single one of your mistakes is a reminder of something that you learned, something that was valuable, something useful you extracted.
I read an amazing book that cemented a lot of these ideas for me and made them more than just ideas: “The Obstacle Is the Way” by Ryan Holiday. He presents an amazing formula for turning your toughest trials into your greatest triumphs.
I’m telling you, the lessons in that book are a deep part of our company’s core value here at Awesomely. Our entire team read it, actually. It’s that powerful.
We took the lessons from that book to heart — that every single mistake, every single failure, every single obstacle you face is packed with opportunity… opportunity for you to become a better version of yourself because of it.
Just writing about it I get excited. It offers so much potential for growth and development.
So, in your real estate investing game, in every single deal that you do that goes sideways or goes downhill… those are actually precious moments that you can sit with and extract value from and become better because of them, thanks to them.
Get the book and apply its methods to any goof up, mistake or whoops you make in the future. Because you will mess up — we all do — but this way, you’ll be prepared to come out of it better on the other side.