When Starting Your Real Estate Investing Career Be Sure To Avoid These Common Mistakes
Becoming a real estate investor can be extremely lucrative, but it can also be complicated and scary. Here are some of the most common mistakes new investors make when investing.
Never Pay Too Much For Your Deals
If you want to ensure that you never overpay for an investment, you have to know your numbers. Newcomers to investing often overpay for properties because they base their offers on the sellers asking price rather than the market value of the property. It’s important to remember that the “asking” price is what the seller hopes to get for the home, not necessarily what the home is actually worth. Be sure to do your due diligence and research each investment before you make your offer.
Be Careful Miscalculating Your Expenses
When purchasing an investment property, one of the most common mistakes a new investor makes is miscalculating their rehab expenses. Each property is different and the remodel computations should be unique to each individual purchase. High End luxury neighborhoods require very different finishes than low income neighborhoods. If you need assistance figuring out what type of remodel works best in a particular location, schedule a few showings with local real estate agents to view the active listing in your area.
Ensure You Research Your Deals Properly
A lot goes into picking the right property to invest in. First, you need to know what your overall plans are for the property. There are numerous ways to make money on an investment property. You can choose to remodel it and resell it, or purchase it as a rental, or maybe you just want to wholesale it for some quick cash. Before you make an offer on any property, you need to know what your end goal is in order to make the correct offer to the sellers. Be sure to research the area market value, hold time before resale and general rehab costs per square foot as well as the neighborhood’s rental information so that you make the correct investment decision for that particular property.
Don’t Do Everything On Your Own
Investors are entrepreneurs, and as entrepreneurs we tend to try and do everything ourselves. This can be counterproductive when dealing with investment properties. Every successful real estate investor understands the importance of a team. In the beginning, you may have to do most of the work on your own, but the goal is to build a team of like minded qualified professionals to assist you in growing your investment business. A good acquisition team can help you find deals and keep your pipeline full. A trustworthy construction crew can ensure you don’t overpay on your rehabs and a loyal office staff can help you stay organized and on point. A good investor is always looking to grow their business and in order to scale you need a solid team.
Start Investing Sooner Than Later
One of the most common things I hear from successful investors is “I wish I would have started sooner”. It’s important to understand that there is no such thing as a perfect time to start investing. The best time to start investing is now, ..today. Here are the three most common reasons people wait to invest; Money, Time and Fear.
Money: Contrary to popular belief, you don’t need a lot of money to invest. You can begin investing by Wholesaling properties for very little out of pocket expenses. You can start small and work your way up the ladder.
Time: If you're waiting for the right time, there isn't one. If you’re waiting for extra time, you’ll never have it. You need to make time. Successful people don’t wait for opportunities; they create them. If you have to work a 9 to 5 job to pay your bills then work on your investment goals from 6 to 11.
Fear: Fear is the illusion of what might happen if you attempt to do a particular thing. Do not let the fear of failure stop you from creating the life you deserve. Remember one simple fact; you cannot fail if you do not quit.
Remember that it’s ok to make mistakes. Every successful person will tell you that they failed their way to success. If you want to begin investing in real estate; start today. Accept that there will be failures. Be ready to adjust your tactics but never your goal and never, under any circumstances, quit.