Over time we have grown to appreciate the importance of having a pipeline of property deal opportunities and to have patience not to force things or get too downhearted.
And the last few weeks have been a very real reminder of the up and down journey to source and secure a satisfactory property deal.
Most recently we had a very strong cash offer (in our opinion 😊) turned down on a bungalow that sat on a nice flat half acre site. Our initial due diligence with multiple agents, our architect and build team validated our plan to extend the bungalow under permitted development and subsequently build 4 new houses on the site. It could have been a cracking little development however, after several back and forths the vendor turned us down. This is one that we really wanted, as we had multiple strong exits, so naturally felt very disappointed with the ‘thanks but no thanks’. I let myself feel properly p#ssed off and disappointed for a few minutes before reminding myself that deal flow is the antidote to deal disappointment.
Within the same 2 week span I very narrowly missed out on a 2 bed house that could be converted to a 4 bed for either a RTB or a flip in the same year, plus there was a great office to self-contained apartment conversion opportunity that another investor just beat us to.
Whilst it would be nice if everything that makes our shortlist for serious diligence could come off, it’s just not realistic.
So, what’s the point in sharing all of this? People only want to hear about amazing deals coming off and success stories, right? Well, not always. It’s great to share news of deals coming off but from several recent conversations in mastermind and coaching groups, I’ve observed several people experiencing the same disappointed so my hope is that sharing the experience and learns from the ‘ones that got away’ is helpful to refocus back on the deal flow.
The below is by no means an exhaustive list, but here are seven key points that Chris and I keep reminding ourselves of along the property investing journey:
#1: You can’t be too emotionally attached to any one deal and you certainly don’t want to stay down and disappointed for too long when a deal doesn’t go your way (that could hold you back from seeing the next opportunity)
#2: The antidote for deal disappointment is to have multiple deals to consider, hence the importance of DEAL FLOW
#3: Having a selection of shortlisted deals to consider will prevent you from becoming too emotionally invested in any one deal. With only one deal on the table it can bring about a sense of ‘this has to work’ and that can lead to force fitting, irrational thinking and accepting unnecessary risk.
#4: A decision to proceed with a deal can’t be based solely on the most optimistic outcome playing out. It’s wise to bottom out multiple exits and to see a way to be satisfied with a conservative/secondary outcome.
#5: Deal flow comes when you can be clear about the end audience you are serving, be clear on the kind of properties/sites that meet your range of criteria, and you know the input activity required to uncover the kind of deals you seek.
#6: Getting to a no decision on a potential deal should be framed as a mini victory in itself – it should serve to refine your analysis skills, validate what you really want from a deal and get you a step closer to the good deals.
#7: Keep a record of the deals you have shortlisted and analysed because they may just come back round and present an opportunity to acquire cheaper/or create more value than you previously expected.
CONCLUSION
Knowing the reality of this emotional rollercoaster that property entrepreneurs have to cycle through weekly, monthly, yearly – this is why mindset is such a big part of the property game. You can’t one up the universe and avoid these highs and lows, but you can develop a mindset to work through the dips as quickly as possible.
What have been your highs, lows and lessons on the property deal front recently?