what's going on guys this is Chandler
Smith and today I'm gonna be talking
about the 10th deal that I ever made in
real estate and this deal was actually
on a four-plex and turns out this deal
was the biggest mistake that I have ever
made up to this point in my investing
career so I'm gonna talk about what I
look for in the property how I came to
the decision to pull the trigger on it
and what I did that literally has been
the biggest mistake and I'm hoping that
will help you to avoid this same mistake
so let's jump into it in order for you
to fully understand this deal I need to
tell the backstory on it so with this
deal I was at a situation in life where
I'd already purchased a lot of real
estate and I had gotten to a point where
I was a little bit complacent I hadn't
picked up a deal in a minute and I was
really getting thirsty for a deal and so
I was out looking and I connected with a
guy named Z now I did a video way back
when it was actually the first youtube
video that I ever did I'm gonna post the
link right here but it was an interview
I did with Z now what's so cool about Z
is he actually owns over 14 million
dollars worth of real estate and so the
video I did with him I went up I looked
at all his real estate I interviewed him
and we talked about some of the things
that he's done to be able to acquire all
of that real estate so if you want to
check that out again go check that link
but I learned a ton from Z I also found
out that he had a couple for plexus that
he was wanting to sell and I actually
think I found this out before I went and
did the interview with him and so with
these four plexus I fell in love now one
of the four plexus was beautiful because
a lot newer it was really nice had
volunteers upstairs and it was just an
incredible property and I was hooked
however I thought the rents were already
about as high as they could get I
thought maybe I had a little little bit
of wiggle room but they were about there
he also had this other four-plex right
next to it there was a little bit older
but still
an awesome 4 flex and again rents were
good but they might have had a little
room to move
so I ran my numbers on these 2 4 flexes
I talked to Z we went back and forth and
he told me he was willing to sell them
to me at six hundred and eighteen
thousand dollars no I still remember I
shook his hand I said Z that sounds
great let's do this thing
now what happened is I went home I
pulled up the numbers and I was getting
about a 9% cash on cash return with the
current rents that he had the property
yet and I thought oh maybe I could get
the 10 but at that point I was super set
at holding to a 15% cash on cash return
and even though I loved him even though
I thought they were beautiful properties
I said you know what this is where rents
are at I don't know this area town very
well I'm not sure that I'm gonna be able
to get them up to where they need to be
so I went back to Z I called him the
next day and I said Z I'm so sorry man I
hope you can forgive me but I just don't
feel comfortable going through with this
deal I don't think the rents I'm gonna
be able to get where I need them be for
the kind of return that I'm wanting and
I bailed on the deal now this time
interest rates were like four point two
five or four and a half and rents had
been kind of stagnant all right they
were starting to go up a little bit but
the truth is I wasn't watching the
market as close as I should have been I
gotten a little complacent so I passed
on the deal now in the next six months I
got into a place where at another
property that I wanted to sell I decided
I was going to sell it and I was going
to use a 1031 exchange but I was having
a real hard time finding property in
that six month period rents here in
Idaho Falls had gone nuts I don't know
what happened it was a really weird
situation but I feel like everyone
realized holy cow we need more housing
we can bump rents we can afford to do
this and so rents were going crazy on my
units included where I was getting them
up substantially higher with any new
leases that we were signing and so I'm
in a place where I'm like holy cow I
should have bought that deal from Z and
now I've got this 1031 exchange on
not finding any property I'm gonna call
Z up and see if I can still put this
deal together so I reached out to him
and he had already sold
right it was gone never to be sold to me
again and so I was super bummed however
the one on the left was still for sale
he was willing to sell it he doesn't
really like Realtors so it was all off
market so I went I talked to him he was
bumping the price a little bit
originally he was gonna give me both for
six hundred and eighteen thousand and
the one was probably worth quite a bit
less than the other one but he said you
know what Chandler I'll sell this one to
get for $300,000 which still was a
pretty good deal and I said you know
what Z let's do it I knew I could get
the rents up he had already got the
rents higher in that one a little bit
but only six months had gone by however
it was a really weird time because
interest rates shown up through the roof
so now my interest rate was like a 5.7
on this four-plex when I could have got
a 4.25 four and a half literally only
six months before and I know that's hard
to believe but something crazy had
happened where things had just really
bumped up in that couple month period I
looked at the numbers and I'm like well
with a 1031 exchange I am aware I think
I can get rents I think it's worth it so
I ended up pulling the trigger on this
four-plex at a higher interest rate at a
higher purchase price and not in the
deal with the four-plex that was right
next to it that I absolutely loved and
so after being through evictions floods
all kinds of issues with my properties
and honestly my management company takes
care of most of those but after all of
that crap I'd been through the biggest
mistake that I had made at this point my
investing career was passing on those
two for plexes and looking back it's
20/20 vision and I know we sometimes
feel like oh I missed out on the deal of
the century and that's just life you've
got to move past it but I learned a
valuable lesson first off I was not as
knowledgeable as I should have been on
the current market I should have seen
that rents were starting to increase I
should have known that I could have
gotten that property to a place where
the rents would have been worth it and
what
been an incredible deal for me and I
shouldn't have chickened out and passed
on the deal there's a big difference
between passing on a deal that's good
where you know the numbers work and
passing on a deal where the numbers
don't work but you just buy it because
you like it with this property had I
known the market had I recognized what a
big role those low interest rates were
playing and had I have just taken the
time to say hey what is the true market
in this area what direction is it going
will I be able to get my desired return
if I would have put in the time instead
of just looking at the deal and say you
know what it's not a total knock it out
of the park 20% cash on cash return so
I'm gonna pass if I would have really
gotten into it and recognized the true
value that property had I wouldn't have
passed on an incredible deal and I'd
have four more units that I own right
now and the big lesson that I'm hoping
you will get out of this deal is that
when you know that a property meets your
numbers it meets the criteria you know
where you can get rents you've got to
have the confidence to be willing to
pull the trigger I'm hoping after
watching this video that you figure out
exactly what you need your numbers to be
at you know your market you know where
you can get rinsed and you are ready so
that when the right deal comes you can
pull the trigger because I have huge
regrets about missing out on that combo
deal now it still worked out great a
1031 exchange the home I got this
property and I actually did a video
walkthrough and talked about the numbers
and the property and I'm gonna put that
link right here and that video for some
reason in the last month has just
started going crazy it's getting about
2,000 views every 48 hours and I thought
it was a cool video when I filmed it but
that'll give you a full walkthrough of
this property how I did the 1031
exchange so if you want to know more you
can click the link above and go watch
that walkthrough however the biggest
thing I want you to
out of this video is when you find a
deal that works you've gotta have the
guts to jump in because you'll regret it
if you don't now if you enjoyed the
video make sure you push the like button
subscribe to the channel and I look
forward to helping you to create a huge
a passive income for yourself thanks so
much guys have a great day just dreams