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I Lost Money On My First Real Estate Deal...

Name: I Lost Money On My First Real Estate Deal...
Uploaded: 2024-08-22T01:30:23+00:00
Duration: 59 s
Channel: Shanli Liu, CPA, CTP
Description: In this video, Shanli Liu, CPA, CTP recounts a personal experience where she lost $50,000 on her first real‑estate investment. A friend introduced her to…

22 Aug 2024 · 1 min

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In this video, Shanli Liu, CPA, CTP recounts a personal experience where she lost $50,000 on her first real‑estate investment. A friend introduced her to a dealer who claimed to sell Ohio houses for $50,000 each, promising $6,000 annual cash flow. She bought one, only to discover the property was misrepresented: it was a two‑bedroom house with a makeshift third bedroom in a closet, lacked legal electricity (tapped from a neighbor), and had an unusable driveway. County records revealed the seller had bought the house for $19,000, and she could only resell it for $20,000. She reflects on the costly lesson about the necessity of thorough due diligence and careful property sourcing.

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I lost $50,000 on my first real estate deal ever. So a buddy of mine's like, hey, I've got this guy. He sells houses in Ohio. And so you can buy these houses in cash for like $50,000. Each house can make you like $6,000 a year in cash flow. And there's a guy who, all he does is he specializes in finding these particular houses and then he'll basically give them to you and he'll set you up with a property manager. But I said, why don't I just buy one of these houses and see what happens? The papers transferred. It turned out that the house was not in fact a 3-bedroom. It was actually a 2-bedroom house, and the 3rd bedroom was actually in a closet that they'd put a mattress into. The house did not actually have electricity. They were running it from the neighbor's house illegally. The driveway was so in shambles that the people couldn't actually park on it. A friend of mine who is in real estate looked up the county records or whatever and found out that the guy who had sold it to me actually bought the house for $19,000. I ended up selling the house for $20,000. I called the guy up who sold me the house, and I was like, I just want to let you know I'm really grateful that you taught me this lesson for so cheap.