Getting Ripped Off in Real Estate? You Might Have Done It to Yourself, A Houston Investor's Honest Breakdown
After 20 years of real estate investing in Houston I've watched a lot of investors lose money. And in most cases, if they're being honest with themselves, they did it to themselves. Not because the market was bad. Not because they got unlucky. Because they fell into one of three predictable patterns that I've watched play out hundreds of times. If any of these sound familiar, keep reading.
The 3 Types of Investors Who Lose Money on Real Estate Deals
1. "This deal is amazing!!!"...."okay its not so good, but I can make it work"...."Okay, I do it and cut corners"...."I won't get permits or put on a new roof".....
These are the people who desperately want to make a deal work so they try to get the numbers down by delaying turning on power/water, hiring "handy men" instead of skilled trades (and hiring the cheapest one they can find).
This typically turns into the "guy" not finishing, doing horrible work, delay's, damage causing additional work. Most of these "guys" just want work. And most believe they can do a good enough job to satisfy (intimidate) you enough to pay them....something.
This group of "investors" typically spent no time educating themselves on how construction/trades work and how best to manage working with them.
2. Cocky, and think they can "figure it out as they go" or that they can throw money at the problems.
These are the people who are 100% emotion based investors. They LOVE the house, they LOVE the neighborhood, they LOVE the feel...
These people typically get swindled by the flashy contractors with the embroidered polo shirts and f250 trucks. (4x4 lifted). These guys will sell you on extra's that are a good idea at a rate that would make a furniture salesman blush.
Don't let the fancy company card and full FLASH website fool you into thinking that the quality of workmanship is as well thought out as the sales pitch. An A+ rating w/ the BBB can be purchased and so can a bunch of "reviews".
3. The people who don't even get that far. They spend all their money on seminars, boot camps, bus tours, and the rest of the regurgitated tactics the gurus use to suck them dry.
The worst part about both groups is that the mistakes are completely avoidable. A basic understanding of how construction works, what things should cost, and how to read a contractor bid would have saved most of these investors tens of thousands of dollars. That knowledge isn't hard to find, but it does require actually looking for it before you need it.
There is absolutely nothing wrong with hobbies. I know way more about NASA than necessary for a guy who will never go to space. But I also don't lie to myself about that and thus can't get talked into "space camp". Knowing why your doing something is just as important as what your trying to know.
Knowledge saves time, energy, imagination, and information. Get you some.
The common thread through all three groups is the same, they didn't have anyone in their corner who knew what construction actually costs, what contractors are actually doing, and what a deal actually looks like when the numbers are real. That's exactly the gap I fill for Houston investors every day.
If you want someone who will tell you the truth about your deal before you lose money finding it out the hard way: let's talk.
📅 Book a free 15-min strategy call: calendly.com/jeph-reit
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