We all make mistakes - we are only human! However, don’t make the same mistakes that others have made before you. Learning from your mistakes is a valuable process that separates the successful from the unsuccessful. Wisdom, though, can be found instantaneously from taking the thoughtful words of those that have come before us. Today we will take about the top ten mistakes of getting into Real Estate.
10. Not Leaving Room To Grow
A lot of times, people want to FHA or VA into a fourplex, and find that they want to get into a duplex or single family home. This is a great move. OR, first time home-buyers buy a giant home with too high of a mortgage. Leave yourself room to grow your real estate portfolio by leaving room to upgrade, or expand your portfolio. Start small, and grow.
9. Not Performing Due Diligence
This is your time to find out if your prospective property has good bones. Take time and act seriously during this instance. This can make or break deals, and you should take full advantage of inspecting whatever deal you are working on. Don’t be scared by issues that can be easily resolved, be scared by the ones that will haunt you forever.
8. Being Too Aggressive
Sometimes investors want a lot of properties, and they want them now. Only try to find deals, don’t get yourself in a position where you are buying something just to buy. If you are in a recessive economy, maybe that is the right mentality. However, if you are in a flowing and thriving Real Estate economy, don’t be too aggressive. Find the right deals!
7. Setting Unreal Expectations
This ties in with the last one. If you want a three bed, two-bathroom house in a great location, and you think you can get it for $100,000 under what market dictates, you’re wrong. If you’re not willing to set real expectations due to lack of market knowledge, you’re better off sitting on the sidelines and not wasting your time and the time of those around you.
6. Not Setting Big Enough Goals
How many of you wanted to stock shelves at Wal-Mart? Probably not many. Set your goals higher than you think possible, and aim. If you aim for the stars and miss, you might hit the moon. Act like you are aiming for the stars every day and you will surely hit your goals!
5. Being Too Greedy
Want to make 200% margin on your flip? Want to walk into a home with $200,000 in equity? You might want to think again. Real Estate does have once in a lifetime deals, but they are few and far between. Get real with your margins and what is possible. If something sounds too good to be true, it probably is. Greed can distract you from a good decision and put you into deep water.
4. Not Taking Risk
The bigger the risk, the bigger the reward. You simply cannot get into real estate without taking any risk. Nothing is a sure thing. A meteor from Hailey’s Comet can come down tomorrow and disrupt your investment. Your three-year-old can accidentally knock over the Christmas tree and start a house fire. Don’t let fear hold you back from a great accomplishment. No one ever finished Grad school at Yale because they were afraid to flunk.
3. Not Acting Soon Enough
If you’re waiting for the perfect time, keep on waiting. It’s like the people who tell themselves on Monday, when the planets align, that they will start their diet. Monday comes and goes, but it never happens. If you want to get into Real Estate Investing, or just buy your single family home, act now, before it’s too late. Rates go up, rates go down, but acting now makes sense. You need to make your own Mondays!
2. Lack Of Market Knowledge
If you want to get into the rental market, yet it is weak, or trying to emerge in the flipping market with coveted new construction, you need market knowledge. If you don’t have it, wait and study it. Only great understanding of the current market will aid you in your endeavors.
1. Trying To Do It Alone
If you’re trying to break into new ventures, yet you don’t have anyone by your side, stop! Just like in any industry, contact either a professional whose job it is to do these things on a regular basis or some one who has done it before. Remember, you’re not inventing the wheel; you’re just using it. Get help!
Thanks for reading!
CEO / Owner