Learning from My Mistake by Not Getting a Reserve

I lost over $1 million on this mistake. I bought a resort seller financed for $4.5 million, and it was worth about $4.5 million. And I did it at 4.5% interest. So you'd think, of course, this could be an amazing deal. Major problem. I bought this with absolutely no reserve, which means me and my partner at the time could not reinvest back into the resort. So it never got any better. It just kept doing the same. We'd make money in the summer, we'd lose money in the winter. What I eventually had to do was buy out the partners on this with all of my hard-earned money. It cost me 7 figures so that I can start reinvesting back into the property and fixing the actual problems. So what I tell all of my students at Multifamily Strategy, this is why we calculate for the reserve and the cash flow that you need to do your deals. You need to get the math right on the front end, whether you're doing a resort or a multifamily property, an RV or self-storage, every single real estate deal follows the same rules. You need to buy cash flow on long-term fixed rate debt, and you have to have enough reserve to actually make it through the project. Common mistake. This one cost me 7 figures.