Hi, it's Karen...

Deal or No Deal...that is the name of the game Steven and I have been playing since Friday. If you have been following our real estate adventures on this blog, you know that on Friday we made two offers on homes we found through the MLS.

The offers were due to expire Saturday at 9 p.m., so when we still had not heard anything by 6 p.m., we called our agent. We finally heard back from one at 8 p.m. Sunday with a counter-offer $5,000 than our offer; the other agent apparently is MIA...our agent has left repeated messages and he has not called back. So that deal will fade away into the sunset...at least for now.

The one we heard back on was the higher-priced property in the mega-hot area, 12 South. Because of the zoning and the big lot, the dinky outdated house could be torn down to make way for a couple of zero-lot lines. Or the house could be added onto and rehabbed. Those were our thoughts as we made the offer Friday, since our agent encouraged us to act fast. But Sunday evening when we got the callback we thought, "Uh, oh...we paid too much. We got this too easily."

Since we set up a contingency of "subject to partners' approval" in the contract this morning we were able to track down an experienced rehabber (via a buddy in our local real estate investment group) in the 12 South area to run the deal by him and see whether he thought we could wholesale it. He was very familiar with the house and lot and confirmed our gut feeling that grew as the weekend progressed: that this is a no deal, because the lot is a) not a corner lot and b) the bulk of the lot goes to the back, not the sides.

Were it not for that, he said a 12 South rehabber or builder would jump to buy it for as much as $250,000, (we offered $180,000) even with a tear-down cost of $6,000-$7,000.

What went wrong here? But more importantly, what went right here? It was a deal, and it wasn't a deal...all because of the way the lot was situated. Whew! It just dawned on me how much we COULD have made were it not for that...best not think about that too much.

Well, we have learned a lot about working with an agent. Our agent is someone we had a prior relationship with and we trust her. But...even though she said she works with other investors, she really does not have a basic understanding of how the numbers have to work, and the risk an investor assumes. It hit me when I woke up in the middle of the night (yes, stress), that she is service-oriented and her goal is to help the buyer get their "dream home". We don't give a darn about the house, termite letters, inspections and so forth...we just want the numbers to add up for a deal.

So it was a lesson in communicating better, educating the agent, trusting our instincts, which have never failed us yet, and just simply walking away when there is no deal.

What we did right was learn the lessons. I am proud of us that we got on the phone to our buddy, found the right experienced person to talk with, and were smart enough to put the subject to contingency in, so that we could just walk away and head toward the next deal!