Real Estate Investment Pitfalls

Top 10 Mistakes That Many Real Estate Investors Make

Real estate investing is something that many people dream of to build wealth, but there are many mistakes that even veteran investors sometimes make. To be a successful you must do your homework and avoid common pitfalls. Learn from the mistakes and experience of others by surrounding yourself with likeminded individuals and working with a coach or mentor; you will have a better chance at success.

Here are some common mistakes that people make when investing in real estate.

1. Thinking that current trends are what will always be. Real estate prices may be going up, but that does not mean that they will continue to do so. Investors who bought real estate when the market values were low can now sell their properties for great profits as the housing market rebounds. However, eventually the market will even out and even decrease. Trends are trends- they are not the prevailing rule.

2. Being overly ambitious with one’s goals. Now, don’t get me wrong. If you’ve paid attention at all you know that I am a firm believer in setting goals and aiming high. However, some people go into real estate investing with thoughts of becoming a millionaire overnight and that is simply not going to happen. It takes time and hard work to turn your investments into something profitable.

3. Looking for properties the hard way. Going through real estate agents, looking through newspapers, and driving around in desirable locations are all time consuming and do not often lead to promising possibilities. What a real estate investor needs are motivated sellers. A smarter way to generate leads is to market yourself to the type of sellers you want, that way eventually you will have people coming to you with properties. Real estate database systems like Find Motivated Sellers Now and Find Cash Buyers Now can and will go a very long way toward driving your success.

4. Giving up too easily. Real estate investing is a numbers game. It will take a lot of leads to secure even one deal. By putting systems in place, it becomes easier to hit those numbers. You’ve got to send out hundreds, if not thousands, of mailers and you’ve got to pick up the phone, smile, and dial. If you don’t succeed in securing the first couple of properties you look at, keep at it; eventually one will fall your way.

5. Many investors waste time and effort looking at houses that they will never even bid on. Target your market carefully and avoid properties that won’t be sold to you or that are not what you are truly looking for.

6. Not having a business plan. Many investors make the mistake of treating their business like a hobby. It isn’t. Real estate investing is about making money; real, and serious, money. Like any business, you should have short term and long term plans.

7. Not doing homework on the current marketplace. You must know what the trends are, what people are looking for, what is and is not selling in your area. You must also know which real estate investment niche is your best bet in the area you are investing in. Many are finding that in some larger cities, rental properties are the best way to go; in other, more rural areas, flipping may be your best area of focus.

8. Not building a team. Many real estate investors think they can wear all of the hats in their business. This can be a fatal error. You must build a team so that you can focus on what you are best at and leverage the talents of others for optimal productivity.

9. Not knowing current costs for repair services. Many investors do not allocate enough money for rehab. Repairs often run more than expected, so calculate that into your budget, and then some.

10. Spending too much on the initial investment. Many investors pay too much for their properties in their rush to secure an investment. Calculate a maximum price that you can afford, factoring in rehab, where you will still be able to turn a profit and do not pay more than that.


About Kent Clothier

Kent Clothier is President and CEO of Real Estate Worldwide (REWW), a highly sought-after speaker, the owner of three multi-million dollar a year Internet marketed brands, and proud husband and father. Kent is motivated by his love of family and freedom, creating products that enable people to live their lives the way they choose.

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