subject: How To Avoid 10 Most Common Real Estate Investing Mistakes [print this page] How To Avoid 10 Most Common Real Estate Investing Mistakes
A lot of real estate investors fail in their real estate investing business because of common mistakes they can easily avoid.
This article goes through the 10 most common real estate investing mistakes.
1) Adopting too many business models
This is especially common after attending seminars or boot camps. Though it is important to learn many real estate investing strategies, you cannot adopt them all at the same time.
You end up losing focus and closing few or no deals. Take one or two business models such as wholesaling, lease options, etc and stick with it.
When you increase your capacity, you can handle more business models.
If you are a newbie real estate investor, you must take one business model at a time, polish it, then adopt another if necessary.
When you have too many business models, you cannot target your advertising. If you are trying to reach everyone, it is likely you will reach no one.
Even if the advertising works, the resulting chaos could see you losing most of those leads.
2) Not having an exit strategy
You must know how a property will make you money before you buy it. Unless you do this, you are likely to lose money.
You structure any real estate deal depending on the exit strategy. You are likely to adopt the wrong strategy and lose money if you have no exit strategy in place before you buy.
3) Paralysis of analysis
We must be careful, but you can never be 100% careful. Lots of real estate investors spend most of their time analyzing deals in agonizing detail, leaving no time for anything else.
No matter how many strategies you know, you cannot make all deals work.
4) Not telling it like it is
This can land in hot soup pretty fast. You must let the seller or buyer know exactly what to expect.
This is especially important when you wholesale properties or take them subject to the existing mortgage.
5) Doing it all yourself
You do have to save some money, but let professionals do their work. As a real estate investor, you are a business person. You cannot be the closing agent, attorney, contractor, etc.
Concentrate on building your business and let professionals do what they do best.
6) Doing cheap or bad work
This happens when you do it yourself, or when you are trying too hard to save some money. A shoddy repair job is unlikely to attract buyers; instead you will be stuck with a property you cannot sell.
7) Being personally attached
It's your first deal, and the house is too beautiful, you love it - so what? The minute you get personally attached, you spend too much money 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 foot soldiers who do what you do. There is a lot to learn from them.
9) Not having a dream team
Build a team of people who deliver the services you need - title company, attorney, contractors, roofers, plumbers, real estate agents, mortgage brokers, etc. They are just a phone call away when you need them.
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 you can improve with every next deal that you do.
Your real estate investing business will continue growing when you do not repeat mistakes you made in the past.
