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Fire Sale... Bad moon rising!
Well, since the "buyer" dissapeared on us -- I've had some tough decisions to make. I've never lost money on a flip in the history of my company, but this might be the time when I have to break that perfect record. It's either that -- or risk losing a lot more in the long run, depending on how much longer I end up having to hold this property.
In the past few weeks, I've been hoping that I can still eek out a profit on this one -- as I've been slowly and gradually dropping my price on average about once per month. The carrying costs have slowly been eating into my savings as well during this time -- hemmoraghing about $1300 per month in carrying costs. If this continues, I will be completely broke and borrowing on lines of credit to just keep the lights on in about 2-3 more months.
With this in mind, I've decided that it's foolish to let my pride cause me to risk bankruptcy over such a relatively small amount of money. After hearing a story from a friend of mine yesterday about how one of his associates lost $60k on a real estate deal earlier this year -- My possibly losing $5k or $10k seems relatively small. It seems especially small when you think about what my excellent credit is worth in the long run. If I leave a blemish there -- it will take 7 years to recover, and my Real Estate company will essentially be out of business. If I'm able to preserve my credit, even though I'll lose money in the short term -- I can build my business back up when the economy is doing a little better, and I can make a lot more than $5 or $10k.
So with this decided, I've gone ahead and dropped the price of the flip to under $100k -- at a $99.9k price point. This is about $25k below where we started listing it back in June of 2009. I feel strongly that being priced under $100k should bring out all the buyers, because there is absolutely nothing even close to this price range that is anywhere close to the quality we have provided.
Wish me luck folks... As Alec Baldwin's great character says in the classic film Glengary Glenross, "It's Fuck or Walk"...
In the past few weeks, I've been hoping that I can still eek out a profit on this one -- as I've been slowly and gradually dropping my price on average about once per month. The carrying costs have slowly been eating into my savings as well during this time -- hemmoraghing about $1300 per month in carrying costs. If this continues, I will be completely broke and borrowing on lines of credit to just keep the lights on in about 2-3 more months.
With this in mind, I've decided that it's foolish to let my pride cause me to risk bankruptcy over such a relatively small amount of money. After hearing a story from a friend of mine yesterday about how one of his associates lost $60k on a real estate deal earlier this year -- My possibly losing $5k or $10k seems relatively small. It seems especially small when you think about what my excellent credit is worth in the long run. If I leave a blemish there -- it will take 7 years to recover, and my Real Estate company will essentially be out of business. If I'm able to preserve my credit, even though I'll lose money in the short term -- I can build my business back up when the economy is doing a little better, and I can make a lot more than $5 or $10k.
So with this decided, I've gone ahead and dropped the price of the flip to under $100k -- at a $99.9k price point. This is about $25k below where we started listing it back in June of 2009. I feel strongly that being priced under $100k should bring out all the buyers, because there is absolutely nothing even close to this price range that is anywhere close to the quality we have provided.
Wish me luck folks... As Alec Baldwin's great character says in the classic film Glengary Glenross, "It's Fuck or Walk"...
(Anonymous)
No shame!
No one promises being an entrepreneur or self made man will be mistake free or won't cost you sometimes. In fact, it's guaranteed. It's how you treat the mistakes when they happen and whether or not you learn from them. And whether or not you let yourself be build up by them or defeated.
How many bad deals do you think The Donald has been involved? Think Richard Branson's never lost money on a deal? NO!
Go read "The Dip" by Seth Godin. When I did, my eyes were opened to the fact that sometimes, quitting on something is the SMART decision.
Yeah, it hurts...but it also makes you a better version of yourself.
My best,
...jp
Re: No shame!