Season 1,

66: How to Lose Money by Failing to Close a Deal with Jonathan Twombly

July 14, 2017

Jonathan Twombly’s story will inspire you that you can bounce back from a failed deal, no matter how intense or difficult it is.

Mr. Twombly is President and Managing Member of Two Bridges Asset Management LLC. Before founding Two Bridges, he was a partner in the real estate investment firm TRB Investment Group LLC. He began his career as a lawyer and spent over a decade practicing in American Lawyer Top 100 firms, where he focused on real estate and hospitality matters.

Mr. Twombly holds a bachelor’s degree from Harvard College and a law degree from Columbia University School of Law. He currently serves as a member of the board of directors of the Harvard Alumni Real Estate Organization, Inc., a non-profit.

Time Stamped Show Notes

[5:40] After practicing law, Jonathan wanted to go the entrepreneurial way and became interested in all kinds of investments.

[6:30] After the 2008 crash, the recession was so bad that people weren’t suing each other, so he had no work to do. He started looking into real estate while being a litigator.

[8:15] Jonathan was told that unless someone takes him as a partner, it would be hard to start with real estate.

[9:49] Two years after the crash, he was terminated from his job and met someone who liked him and wanted to partner with him.

[11:28] He introduced the woman who wanted to partner with him to a couple of friends who were interested in giving him money to invest in this new venture.

[12:50] People wanted to pay their debts so after the recession, so sellers were expecting unrealistic amounts of money for their property.

[14:19] Jonathan got two C- deals with the same seller, which were cash flowing properties.

[15:53] The bank who was going to loan money for the first deal turned them down for various reasons.

[18:41] Not thinking about asking the seller for more time, Jonathan and his partner panicked and wanted to minimize damages by looking to have the deal financed without paying another fee to a bank. They managed to have their deposit back, but lost money on fees.

[22:40] Total of fees was around $10,000 to $15,000 each. The second deal was also terminated because the partner didn’t like that the water heaters was shared by 4 apartments each.

[26:17] Failing Forward Segment

  • What is the bottom line reason of this failure? – “Inexperience. Lack of being sure of myself at the time.”
  • What is the single most important lesson they and you learned from this? – “Trust your gut and there’s just no substitute for experience.”
  • What are the major ways you protect yourself from future failures? – “Now I have a lot of experienced people that I partner very closely so I can lean on them.”
  • Who do you turn to when you need help? – “I belong to an organization called the Entrepreneurs Organization.”
  • What advice would you give to someone in a similar position? – “Keep your chin up and keep moving forward. Don’t let that be a reason to stop you.”

[33:34] You can find about Jonathan’s Two Bridges company http://twobridgesmgmt.com/. He also has a Facebook group called Multifamily Investment Community, just send your request to join.

[36:02] Jonathan’s final thought: “Real Estate is a great business, it’s a great way to do something fun and meaningful, provide quality housing. If you’re in this business and you’re struggling, keep moving forward and it’ll happen for you.”

To hear this episode and many more like it on your mobile device, you can subscribe to How To Lose Money via iTunes or Stitcher.

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