How I Lost a Condo Bid While My Son Got Super-Hearing 🦸‍♂️

Can I share a story with you Reader,

You know me - I love buying real estate like I like popping bottles. So every year or two I find myself making a transaction, whether it's buying, selling, or renovating one of my properties or something for a family member (usually mom). Every once in a while there is a moment that hits me in a certain way and I feel the need to share.

Just a few days ago, I made my first offer, since 2017, to buy a new rental property. It marked a turning point for my new firm and my full-time role as a real estate investor. Let me share the inception of this deal and its eventual failure to materialize.

Rejection: when someone says you can’t have what you want

Picture this: I'm in a hospital waiting room with my son before his surgery (don't worry, he's all good now, routine clogged ear procedure, he’s happy and hearing once again). To distract myself from the nerve-wracking situation I stayed busy on my phone.

I’m checking my phone neurotically for updates on the offer I made on a condo just a few hours before. At the time, I’m feeling good about myself and my mind was racing with visions of contractors transforming the place. I had told myself no more condos (HOAs are the worst), but this was a rare find that we could get filled with a paying tenant inside of a month. All the while, my son is busy watching Spidey & Friends on the waiting room TV.

The day ended on a high note as my little superhero emerged from surgery healthy and feeling great—at just five years old, he's already achieved the milestone of having surgery, something I've never done!

But, alas, I lost the bid for that FOMO-inspiring two-bedroom condo in Silver Spring, MD listed for $97K. My $101K offer came in second out of ten, getting on the podium, but not taking home the gold.

So as quickly as I had gotten myself excited about increasing the portfolio, the amazing underpriced find I had, and the good it would bring for me and my family…it was gone.

But not having felt that high again, like getting back onto the court after retirement, I was already searching for my next deal..

Six months of preparation, to fail in 24 hours

It took me all of 8 hours to submit this offer and get rejected. But the real story begins months ago when I decided to build an investment firm, a big step up from just owning a bunch of homes.

To start, I explicitly told myself “no more condos”. Condos are nice when you're getting started and have served me well, but HOAs can be a headache and buying rentals one at a time is a slow way to scale.

Yet, completely ignoring all that … we'd recently turned away some tenants for my traveling nurse rental (30+ days & furnished) because it was booked. So when the “deals hotline” (aka an email account we have everyone email deals into for the company) showed up at this cheap condo near a hospital … I said f* it. What’s $100K? After all, a 2-bedroom condo in a great neighborhood in the DC area is harder to find than someone who hasn’t heard the 21 Savage & Drake album.

The pictures revealed a hoarder's wonderland, with piles of stuff reaching the ceiling. For me, this was striking gold. You get such a discount for trash, when just two guys, a truck, and $800, gives you a $10K bump in equity. I could already see past the junk and the Airbnb photos we would take showing the balcony and view.

Without boring you with details, this was an off-market deal. No home inspections, submitting an offer with a realtor, getting financing, and all the normal things people think about when you buy a house. This is a “hey, want to buy this, you got 48 hours to let me know, and we need the cash a week after” type of situation. Meaning I have 48 hours to give these people a number and be ready to wire funds. Now my excitement is fueling me through all this quick turnaround work and due diligence.

Then came the moment of truth: deciding on the perfect bid. I spent a sleepless night crunching numbers, analyzing past bids, looking up comparables, texting my property manager , stress-testing my model under various financing scenarios, and learning the ins and outs of this company’s bidding process.

With only hours to spare, I submitted my offer for $93K at 2:00 AM for the 9:00 AM cutoff. Fast forward to 9:30 am and I haven’t heard anything. Being restless, I start texting the seller from the waiting room for some insider info. Turns out, there were higher bids, but still some time. So I reluctantly upped mine to $101K my best and final, confident now that I’ll get it and pop a smaller bottle of champagne to celebrate.

But life had other plans. Amid the euphoria of my son's successful surgery, I received the news that my bid lost. As much as I wanted to win, I knew it wasn't worth paying more. I’d rather lose a house than overpay for it, because there is always another deal to be had.

Years of experience and months of preparation to get our first failure.

This whole story is the culmination of years of experience as a landlord and investor, not including months spent upleveling my investment game. I've spent countless hours researching off-market deals, setting up systems and tools to expedite the due diligence process, and assembling a team to assess opportunities.

While our first investment is already in motion (a delightful Airbnb in Tulum, MX), this would have been our first purchase under the new company, putting some additional wind in our sails.

I’ve talked before about how hard it is for me to answer the "So, what do you do?" question. But, in that moment, I felt comfortable saying, "I invest in real estate...and a bunch of other bullsh*."

- Damien “On to the next one” Peters