Most real estate investors stumble in their real estate investing business because of common mistakes that can be easily avoided.
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. It is important to learn all the real estate investing strategies, but you cannot adopt all of them at the same time.
The end result is loss of focus, and few to no deals done. Take one or two business models such as wholesaling, lease options, etc and stick with it. You can handle more when you increase your capacity.
2) Not having an exit strategy
Before you buy any property, you must know how it will make you money. If you have not done this, you are likely to make a loss no matter how cheap it is.
3) Paralysis of analysis
We must be careful, but you can never be 100% careful. Lots of new real estate investors spend too much time analyzing deals in great detail, leaving time for little else.
You cannot make all deals work no matter how many strategies you know.
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.
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
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 house with sloppy repair work is unlikely to attract buyers and will end up making you a loss instead.
7) Being personally attached
It’s your first deal, and the house is too beautiful, you love it – 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 like a number – 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. You can learn a lot 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 makes ensures you improve every time when you handle your next deal. Your real estate investing business will continue growing when you do not repeat mistakes you made in the past.
In order to run a success real estate investing business, it is necessary to automate most aspects of your business, increase efficiency so you spend less time, money and effort while closing more deals. A lot of real estate investors have achieved this with database driven real estate investing web sites that also automate most tasks of real estate investing.
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