How I spent $75k to learn a real estate lesson I will never forget.
A short (and painful)🧵…
A short (and painful)🧵…
1/ In 2006 I put an offer in on a vacant multi family lot downtown.
It was 27k square feet and in a great part of the city.
It was 27k square feet and in a great part of the city.
2/ The seller was well known for being a ruthless jerk to work with but I wasn’t partnering with him so…
3/ He insisted during negotiations that I only have 20 days for DD then 15 to close, because there were “other offers” reluctantly I accepted the terms and got to work.
I put $75k in escrow as earnest $.
I put $75k in escrow as earnest $.
4/ The Phase 1 came back on day 18 and showed there was contamination but it wasn’t clear how bad.
I went back to the seller and asked for more time to complete a Phase 2. He didn’t respond the first day…
I went back to the seller and asked for more time to complete a Phase 2. He didn’t respond the first day…
5/ Second day (which was also the last day of DD) he responded by phone and said that the cleanup wasn’t a big deal but if I needed more time to explore I could have it.
6/ I sent over a signed extension agreement but not a cancellation. He called me and said he was out flying his plane in Tahoe that day and that he would sign it in the morning the next day and not to worry. (Huge mistake on my part to trust him)
7/ Next day came around and his attorney calls me to tell me that there would be no seller signature coming on the extension and that I now had 15 days to close or the seller would keep my deposit.
8/ I explained to her that I had spoken with her client and he agreed to extend the night before. She replied that her client says he never talked to me about an extension…. He says you spoke with him but that you told him you were “ready to proceed”
9/ I talked to my attorney and quickly realized what a big mistake I had made. Our conversation was worthless, I had literally no way to force him to honor a verbal commitment that he says never happened.
10/ I couldn’t get a Phase 2 done in 2 weeks, and couldn’t get financing on a dirty plot.
11/ In the end I lost my deposit and that lot is still sitting vacant 15 years later.
Moral of the story folks; Put it in a contract.
Moral of the story folks; Put it in a contract.
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