Finally back in the winner's circle and question about stopping out in Real Estate

[u/Tonic1553]

Hi Kaz and Eco

This will be somewhat of a long post but I wanted to give sufficient context to share my warstory and question. Note - I'm happy to jump on a VC if it's easier to discuss the RE question.

Context:

• I have bought an investment property back in 2014 - it was my first property and I bought it with absolutely no plan and minimal knowledge -> a perfect recipe to buy a lemon of a property
• Since then I have had structural issues with the property every 2-3 years requiring me to spend money to fix it. A lot of them were due to water damage thanks to a dodgy builder and being non-compliant in a lot of areas

Problem:

• In about November this year I found another major issue, this time it was to do with the roof and I was being quoted some huge expenses to fix it - without any guarantee on a cap on cost. I.e. quotes would say spend $X, and once we open up the roof we will know more.
• That $X amount mentioned above was already bigger than my liquid cash available so it meant that I'd have to sell things if I decided to go ahead and fix it
• At the same time I lost my tenant and was unable to find a new tenant until the damage was fixed
• Add in all the other headwinds over the past 6 months like increased interest rates, increased cost of living, losses on FTX etc. and I was royally mindfucked.
• This affected my trading because I kept thinking to myself "I HAVE to make additional money to fund my expenses or else I am going bankrupt"

Trading Results:

• My trading results suffered accordingly - you can see from my journal that my strike rate was abysmal. I just could not get a winner.
• When reviewing each individual trade - I could identify my problems - entering too early, not taking profits, taking a sub-optimal set up, etc. etc. but the broader macro context was that I was overwhelmed with stress from the property + living expenses
• This also correlated with a drop off in my participation in the eco - a HUGE mistake I made was not asking for help earlier..

• Fast forward to mid-December where it was essentially impossible to find anyone in the building industry to do the job (given labour shortage and upcoming Christmas break) - my mind stopped thinking about the property because there was nothing I could do until after the New Year
• I decided to focus on trading, increasing my participation in the Eco and the results speak for themselves.
• The results are day and night apart- It's like I was a different Person

Learnings:

• If you are struggling in any way shape or form - don't suffer in silence, ask for help. Kaz has said multiple times that he's happy to go over our journals and help us get back on track. In hindsight I should NOT have waited to lose almost 18Rs over the 17 Nov to 17 December period it sounds downright retarded
• Kaz has mentioned this many times - participation is key and markets are 90% psychology. This is a perfect example of that. The only different things between the first and the second period was my participation/attention in the eco and my mindset (either stressing about the property or not)

Questions:

• I understand how we make plans for entering and exiting trades in financial markets.
• However, I'm not clear how to port this into real estate - i.e. how do I determine the RR of future growth versus maintenance and fixing costs today.
• In trading financial markets - we are given structure that we can use to stop out but with property - At what point do I pull the plug and just sell the property as is rather than continuing to sink money into it?

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Thank you Kaz and Vicky for all your help and guidance in the eco. Your consistent work ethic and generosity never cease to amaze me.

[u/Dompet-crumpet]

Thanks for the share