Deals Gone Bad #3: The Whore House From St Pete With Jonathan Rexford Episode 931
If you haven\u2019t had a bad deal yet, then you haven\u2019t been in real estate long enough. It\u2019ll happen for you, don\u2019t worry. Even with experience, Jonathan Rexford bought a real dud that became the only subject \u201cto\u201d house that he\u2019s ever returned to an owner in thirty-three years of investing. It\u2019s a lesson in doing a little due diligence, especially when it\u2019s a property that\u2019s outside your area of expertise.
When the subject \u201cto\u201d first came across Jonathan\u2019s radar, he had a lot of disposable cash, so he just directed his bookkeeper to write a check for the property. And in fact, every time a problem showed up, he just had the bookkeeper keep paying the bills. But writing a check doesn\u2019t get rid of a problem.
After months of trying to get the house rented, Jonathan finally drove up to see what the holdup was. Immediately, he realized that the beautiful 1920s home, which should have rented for $1422 a month, was surrounded on all sides by low-income apartments. Neglecting to get a street view of the property he\u2019d purchased without visiting ended up costing him about $65,000.
If you\u2019re going to purchase a subject \u201cto\u201d, Jonathan advises you to have multiple exit strategies. Ask yourself:
\u2014Can I rent it?
\u2014Can I retail it?
\u2014Can I owner finance it?
\u2014Can I use a lease option?
After this, Jonathan realized that he needed to always have someone with some skin in the deal with him who could act as his feet on the ground. As the king of the subject \u201cto\u201d world, Jonathan invites you to join him in his Facebook group.
If you loved this story, don\u2019t miss the rest of my Deals Gone Bad. For access to my mind map for this series, text the word \u201cBAD\u201d to 313131.
What\u2019s Inside:
\u2014The minimum groundwork you should lay down before buying a property sight unseen.
\u2014Why you absolutely should not be writing checks to make problems go away.
\u2014Stay \u2018til the end when Jonathan shares his 5 pillars of funding.
\u2014What force-placed insurance is.