Dumb Smart Genius

There are three kinds of people in this world: Dumb people, Smart People, and Geniuses. Dumb people make the same mistakes over and over again. Smart people make mistakes and learn from them, and Geniuses learn from other people's mistakes and just avoid them altogether.

I have often found myself in the 'dumb' and 'smart' categories, rather than in the 'Genius' level. For whatever reason, I seem to have a knack for learning via trial and error more so than any other way. But it wasn't until I started getting around masterminds and coaching that I figured out that I didn't have to discover everything by trial and error.

Over the years, I have also been able to impart some of the mistake-laden past by sharing that with hungry Geniuses who were able to leapfrog over my past mistakes.

I wanted to share a quick story of such an incident.

Distressed Foreclosure:

If you have read my book or followed some of my content, you know I have some experience in doing distressed real estate deals. So often, I get people that seek me out to help them out when they have a sticky situation or an amazing opportunity that looks like it might be an opportunity in a distressed deal.

There was this amazing mansion-like property going into foreclosure. The main house was nearly 10,000 sf with a pool house and an amazing resort-like property, all fenced and gated. It was one of those deals where it seemed like a home run, buy a property for pennies on the dollar and flip it for a quick profit. As I began researching the property weeks and days before the auction, we were able to find out that the occupant was threatening that they would rather damage the property than let the bank take it back from them. For those of you not familiar with foreclosure, this is not unheard of but is much more an emotional and idle threat than a reality. But we were able to research this and find the agent that had represented them when they bought the house. This conversation revealed that in fact, this was not an idle threat and that this owner was quite capable and known for things like that.

Lo and behold, I was able to steer my friend away from purchasing this property, and you guessed it, the former owner did end up doing significant damage to the property. They took a tractor and pulled up the flagstone driveway, they jackhammered the pool, poured concrete down the drains, and then also removed the 15 ft grand entrance door.

Lesson Learned:

Wow, great news! By helping with due diligence, I was able to help this other investor play in the genius category and just avoid a big financial pit of dealing with a psycho former owner. This is why I harp on doing due diligence. I can't count how many times a little extra research can discover some red flags. This is one of the main things I help my clients with in getting into their passive investing journey.

But the story of that troubled mansion doesn't end there for me. While I was able to help avoid that pitfall for one, I soon found out that it was another of my friends who did purchase the property, and now they were stuck dealing with it. And they hired me to come to help solve that problem for them. As it turns out, using insurance to navigate things did quite a bit to help fix the issues, but many of the things on the exterior were not covered, like the pool and driveway.

The moral of the story is that even if you screwed up the due diligence or missed some red flag, it does not mean all is lost.

Next Steps:

I have found that most people who have hired me to help them have done so out of making a mistake and needing to find out how to fix things, versus those that completely avoid the problem in the first place. As I stated earlier, my trial and error process of learning has given me more insights on how I was able to figure things out.

If you find yourself getting ready to get into a new venture or investment, I can't encourage you enough to hire people to help do proper due diligence. If you need any help finding out who those might be for you, respond to this email, and we can connect to find out your next steps.

This also goes for if you are in a sticky situation and maybe like me, you didn't land as a genius and you need to try and see how you can learn or just some other options.

Until next week

Jake