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10 Most Common Real Estate Investing Mistakes to Avoid
Posted By: simon87 | Views: 115 | Words: 653 | PDF View | Print View | HTML Version
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Lots of real estate investors fail in their real estate investing business because of easily avoidable common mistakes.
This article goes through the 10 most common real estate investing mistakes.
1) Adopting too many business models
This is commonly done after attending seminars and boot camps. It is important to learn all the real estate investing strategies, but you cannot adopt all of them at the same time.
You end up losing focus and closing few or no deals. Stick with one or two business models such as wholesaling or lease options and stick with it.
You can handle more when you increase your capacity.
If you are a beginner in real estate investing, then you must select one business model work with it and polish it before you move adopt other models.
When you have too many business models, you cannot target your advertising. When you try to reach everyone with blind marketing, it is likely you will reach nobody.
When the leads start responding, you are likely to lose most of them in the resulting chaos.
2) Not having an exit strategy
You must know how a property will make you money before you buy it. You are likely to lose money if you do not do this.
You structure any real estate deal depending on the exit strategy. If you have no exit strategy before you buy, you are likely to adopt the wrong strategy and lose money.
3) Paralysis of analysis
You can never be 100% careful as much as it is important to be careful. Lots of new real estate investors spend too much time analyzing deals in great detail, leaving time for little else.
No matter how many strategies you know, you cannot make all deals work.
4) Not telling it like it is
You will get into trouble with this real easy. You must let the seller or buyer know exactly what to expect.
If you wholesale properties or take the subject to the existing mortgage, you must explain in detail what they should expect from you.
5) Doing it all yourself
Even though you need to save money, let professionals do their job. Treat real estate investing as a business. You cannot be the closing agent, attorney, contractor, etc.
Work on growing your business - leave the rest to professionals.
6) Doing sloppy work
Most common when you do it all yourself or when trying to save money. A house with sloppy repair work is unlikely to attract buyers and will end up making you a loss instead.
7) Being personally attached
Finally you have got this beautiful house, you love - so what? As soon as you get personally attached you end up spending too much money on it and make a loss.
Treat each deal as a dollar figure, and you will be fine.
8) Not networking with other investors
I have met too many real estate investors in trouble as motivated sellers, but who think they know it all. Their attitude is, if they are teaching it, shouldn't they be out making money instead of teaching?
When you network with other real estate investors, you learn what works on the ground, what they do, how they do it, etc. These are the guys on the ground doing what you do. There is a lot to learn from them.
9) Not having a dream team
Get together a team who does everything you need - title company, attorney, contractors, roofers, plumbers, real estate agents, mortgage brokers, etc. When you need them they are just a phone call away.
10) Not assessing yourself
I like to look through each deal when it's complete to see if I could have done better. This way, every next deal that you do is better.
When you avoid past mistakes, your real estate investing business will continue to grow.
This article goes through the 10 most common real estate investing mistakes.
1) Adopting too many business models
This is commonly done after attending seminars and boot camps. It is important to learn all the real estate investing strategies, but you cannot adopt all of them at the same time.
You end up losing focus and closing few or no deals. Stick with one or two business models such as wholesaling or lease options and stick with it.
You can handle more when you increase your capacity.
If you are a beginner in real estate investing, then you must select one business model work with it and polish it before you move adopt other models.
When you have too many business models, you cannot target your advertising. When you try to reach everyone with blind marketing, it is likely you will reach nobody.
When the leads start responding, you are likely to lose most of them in the resulting chaos.
2) Not having an exit strategy
You must know how a property will make you money before you buy it. You are likely to lose money if you do not do this.
You structure any real estate deal depending on the exit strategy. If you have no exit strategy before you buy, you are likely to adopt the wrong strategy and lose money.
3) Paralysis of analysis
You can never be 100% careful as much as it is important to be careful. Lots of new real estate investors spend too much time analyzing deals in great detail, leaving time for little else.
No matter how many strategies you know, you cannot make all deals work.
4) Not telling it like it is
You will get into trouble with this real easy. You must let the seller or buyer know exactly what to expect.
If you wholesale properties or take the subject to the existing mortgage, you must explain in detail what they should expect from you.
5) Doing it all yourself
Even though you need to save money, let professionals do their job. Treat real estate investing as a business. You cannot be the closing agent, attorney, contractor, etc.
Work on growing your business - leave the rest to professionals.
6) Doing sloppy work
Most common when you do it all yourself or when trying to save money. A house with sloppy repair work is unlikely to attract buyers and will end up making you a loss instead.
7) Being personally attached
Finally you have got this beautiful house, you love - so what? As soon as you get personally attached you end up spending too much money on it and make a loss.
Treat each deal as a dollar figure, and you will be fine.
8) Not networking with other investors
I have met too many real estate investors in trouble as motivated sellers, but who think they know it all. Their attitude is, if they are teaching it, shouldn't they be out making money instead of teaching?
When you network with other real estate investors, you learn what works on the ground, what they do, how they do it, etc. These are the guys on the ground doing what you do. There is a lot to learn from them.
9) Not having a dream team
Get together a team who does everything you need - title company, attorney, contractors, roofers, plumbers, real estate agents, mortgage brokers, etc. When you need them they are just a phone call away.
10) Not assessing yourself
I like to look through each deal when it's complete to see if I could have done better. This way, every next deal that you do is better.
When you avoid past mistakes, your real estate investing business will continue to grow.
