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If you attend MAREIA meetings, you’ve probably heard me talk about OPM. Most people think of this as a term in business standing for Other People’s Money. And, by the way, it’s also the title of a good movie starring Danny DeVito as a shrewd businessman. His speech about business and capitalism near the end is something more people should hear.

However, my definition of OPM is Other People’s Mistakes and how that information can be many times more valuable than not using your own money in a deal. This month, I’m going to relate some details of a deal (almost) gone bad and tell you how you can avoid similar problems.

In this deal, I broke my own rules and it cost me thousands of dollars of profit. Here’s what happened. . .

I had an assignee for a property that I owned (I bought it as a short sale with the intent to flip it quickly). I assumed (mistake #1—never assume anything) that this would be like any other deal. My assignee and I had agreed on a price and he said he’d make the arrangements for the purchase and rehab money before we met to sign the contract.

Within a day, I received a contract from a real estate agent. It turns out that my assignee had never bought an investment property on his own and wanted the agent for protection. He had solid credit, had agreed to pay the agent’s fees and I didn’t have other Buyers lined up so I signed the contract (mistakes #2+3—use your own contract and