In real estate, just as in any business venture, we have to know when to throw in the towel. Or, as Kenny Rogers so famously sang “you gotta know when to fold em, know when to walk away and know when to run!”

Some of you might be saying to yourself, “what the heck are you talking about Andy?” Ok, ok, fair enough. Stick with me for a minute and I will elaborate.

There will be many times in your real estate investing career when you buy a property, fix it up, do what seems like all the right things and yet you are getting little to no showings on the property. This is your worst nightmare. How do you get out of it? What do you do?

The answer is very simple…you quit!

Now I don’t mean walk away from the property. What I do mean is getting the property off of your books as quickly as possible. Let your winners run and cut your losers short.

Listen, I know it is really hard to stomach breaking even on a property…or worse, losing money. But don’t let your emotions get in the way. No matter how much blood, sweat and tears you poured into this deal, if it’s a turkey, it’s a turkey and you have to cut it loose.

When I first got started flipping houses nearly 2 decades ago now (geez that sounds and feels like I am really old! Haha) I had the hardest time with breaking even or taking a small loss on a property. I would think if I could just wait it out a little longer surely someone would come along and buy it for the price I wanted.

WRONG!

You may be feeling the same way on one of your deals right now. The reality is, that if you have the property up on the MLS, it has been sitting there for a few months and you have little to no showings, most likely price is the issue. No amount of hoping and praying is going to change that.

Just because you want to get more for the property then the market is willing to pay you does not mean you are going to get it. It is important to see the reality of the situation and move on.

Listen, it may or may not be your fault. I have gone back and looked at deals that I had that went bad and tried to figure out where I went wrong. Sometimes I can see it very obviously and I take note of that so that I can learn and grow from that. Other times I re-look at the deal and say I would buy it again based on the knowledge that I had at the time. It’s a head scratcher and just does not make any sense.

Whether you are able to see where you made a mistake (over paid, spent too much on repairs, comped the property wrong etc.) or not, what is most important is to take emotion out of your real estate business and sell now for whatever you can get.

Live to fight another day. The emotional and financial drain of trying to chase after your loser and “try” and make it a winner is just not worth it. There is NO shame in throwing in the towel on one of your deals. It is not your baby.

In the fix and flip business time is your enemy. Whether you have borrowed money from a bank, gotten a hard money loan, or even if you have paid cash there is an opportunity cost to your capital.

By letting your capital stay parked in a bad deal you are taking it out of commission from making you more money in a much better deal that you can go buy. When you get caught in the emotional whirlwind of a loser it takes your focus off the parts of your business that you should be focusing on – marketing, buying, selling, fixing your good profitable deals.

So, take it from me and the lessons I’ve had to learn the hard way – sitting on a loser hoping it will get better is just NOT going to happen. Cut it loose and go make it up on your next deal. You will be happier and richer for it.

I would love to hear some of your experiences with dealing with this issue of struggling to cut your losers loose. Leave a comment below.