The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

What to do while the next deal is here?

andviv

Gold Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jul 27, 2007
5,419
2,185
625
Washington DC
Well, here I am again at one of those stages where I'm about to make a mistake.

I worked the last few months to put together a deal and now I'm partnering in a multifamily deal, which is what I targeted for this year. Well, it is done. The partnership is in place and the deal is moving. Now what?

I am always looking for deals.
Not all the times I can find deals in my area. Right now the RE market is taking a deep dip and prices are all over the place. I can smell opportunities here, I have the credit (score above 720, great for getting financing) and some money for down payment.
Problem is, I am seeing myself forcing the numbers in my head again to trying make them work. The rents have also gone down as many that can't sell are putting their properties for rent. I know this is a very common situation in expensive areas where cashflow deals are very difficult to get (Washington DC suburbs). It just won't cash flow.

In the last couple of weeks I've been working on this deal for a property that was foreclosed a couple of months back, the bank has put it for sale and reduced the price a lot. I just finished the numbers' review and found out the max price I could pay to just break even, but would not leave any wiggle room, so it is very risky.

So here I find myself again 'bored' without doing any deals and really close to do a transaction that will not be profitable just to have something going on. It does not fit my parameters for investing. Besides, this is out of my focus area for deals, as I am making the transition to apartment buildings.

I declare myself a "deal junkie". I'm addicted to the rush of working on the deals, the rush of the chase, the numbers review, making the offer, planning the upgrades to the property to improve it, the potential wins, etc etc etc. I know many here understand this feeling. I feel the need of doing something, otherwise I get the feeling I'm wasting my time.

I also know that this has to be under control so I can get to the next level of investing.

So, after this long post, here is my question: How do you experienced investors handle this anxiety?
What are the 12-steps that I have to follow in order to avoid the feeling of not been doing anything and avoid making another mistake?
 

Don't like ads? Remove them while supporting the forum. Subscribe.

randallg99

Bronze Contributor
Aug 9, 2007
1,390
179
92
NJ
So, after this long post, here is my question: How do you experienced investors handle this anxiety?
What are the 12-steps that I have to follow in order to avoid the feeling of not been doing anything and avoid making another mistake?

first, congrats on making a deal work.
secondly, dont make a deal for the sakes of making a deal
thirdly, I can share a story while my wife keeps the channel on Deal or No Deal (what a bunch of schmucks)

a while back, I was negotiating a former electronics (who BK) store location connected to an Olive Garden on one deed... I was trying to get the deeds split away from the Olive Garden and during my dd period I got to talk a bit with the owner. I was able to pick his brains and little did I know this old stingy bastard owned so much land on some of the most desirable and visible retail highways on the Eastern Seaboard.

I asked at one point how he got to where he was and one thing still sticks out in my mind- he told me he lost a lot of sleep because of leverage and also because he made dumb mistakes that took a long time to recover.

This is very applicable to your concern because it sounded like he was a deal junkie just trying to force things to happen... while in his old age it surely seemed like it paid off since the property he was trying to sell me ended up selling to a publicly traded REIT for 6mil this property was small potatoes in between a couple of larger shopping malls/districts that he also owned.

You have to envision yourself with this deal. With this make you happy? will this provide a return? Can you take a few minutes and determine the risks and rewards of this particular deal?

If necessary, write a list of the pros of this deal and the cons of the deal... also include all of the consequences.

My motto is that if it does not cash flow, then it is not worth it.

Regards
Randall
 

KyJoe

New Contributor
Aug 28, 2007
68
15
19
That's really good advice Randall. I will add a quick one that was told to me by a friend that owns a trucking company, "no deal is better than a bad deal". That has stuck in my head for years!
 

yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
2,233
495
192
42
I can relate to the whole forcing a deal to work and being addicted to the rush of a deal in the making. I like what the previous poster said about no deal is better than a bad deal. I'm realizing that I made several mistakes with one of the cabins I own. ...Wish I hadn't bought it. -But it was a great learning experience, so maybe I don't regret it. :smxB:

I also agree that in order for me to get to the next level, I need to be able to get my emotions in check. The biggest a-ha came from a seminar a year or so ago- the speaker made a comment about the deal of the year coming along every week. So true! Next time, I will give myself a minimum of 3 days to act and if I haven't done all my d.d. then I'm not going forward. ...And I'm sticking to my criteria. I have come to learn that investors probably have criteria because criteria are like values. ...They are developed in moments of clarity in order to keep you on the right track, especially when veering off track seems like a good idea!
 
OP
OP
andviv

andviv

Gold Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Jul 27, 2007
5,419
2,185
625
Washington DC
Thanks guys, I do 'know' all the things you have mentioned here. I think the problem is in how to handle the anxiety caused by the feeling of not being doing anything and letting opportunities slip by.

Yves, yes, that's why I have defined my criteria and try hard to follow it... problem is, I find myself thinking of how to make the deal work and try to talk myself into it. The good thing is that I've recognized what is happening so now I can find ways of improve the situation.

Yes, controlling the emotional aspect of it is what I am learning now... harder said than done.
 

Bilgefisher

Bronze Contributor
Read Millionaire Fastlane
Aug 29, 2007
1,849
283
73
Aurora, Co
Perhaps you could do some deals outside your area that are more profitable. I don't know the logistics of doing this, but merely a suggestion. Another possibility is find something that gives you the same feeling of accomplishment that you can satisfy that need to be doing something. Just some suggestions from a no net worth guy.
 

yellowpad

PARKED
Oct 3, 2007
30
0
10
47
Orange County, CA
if you declare yourself a deal junkie...start another one when one is done. That way, you will have endless supply of deals to drool over all the time :) When you do something you love, it won't look like work anymore. The way you mentioned in your post, you should be having fun.
 

Runum

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Aug 8, 2007
5,990
4,392
1,788
DFW
Yes, controlling the emotional aspect of it is what I am learning now... harder said than done.
:iagree: I too fight the deal monster. I feel your pain.:cheers:

Greg
 

tbsells

Contributor
Jul 27, 2007
304
57
31
Ohio
Andviv,
The realization that you may tend to chase a deal a little too far is more than half the battle. Its a common problem. The deal does provide a certain rush for alot of people. I'm one of them. The people who are in trouble are the ones who do it but don't know it. You know the deal is marginal, re-evaluate it based stictly on the projected numbers, and above all stick to your criteria. Remember there is an opportunity cost to everything we do. If you do this marginal deal you may not have the funds or the ability to finance the really good deal that comes along next month. Someone told me once "Always want a deal but never need one." It makes alot of sense.
Always be willing to walk away.
 
Last edited:

tbsells

Contributor
Jul 27, 2007
304
57
31
Ohio
Andviv,
I don't think there is a 12 steps for this. Its really not a problem if you keep it under control. Obviously, you have. Think of constant deal analysis as practice and shopping for the good deals. I do it all the time. I know the feeling you describe. You just have to use it to your advantage. Control it rather than letting it control you. It shows passion for what you are doing which is always positive. Think of it as a fine tuning process to make you a better investor. Kind of like a clay pot being molded on the artisans wheel.:thumbsup:
 

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.


Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom