Real estate investing is not a simple game to play.
It is filled with traps and pitfalls that can derail your progress and stop you dead in your tracks.
We know because we’ve been there.
With nearly two decades of cumulative experience, we’ve made every mistake in the book and learned our lessons along the way.
However, as Warren Buffet says, “It’s good to learn from your mistakes but it’s even better to learn from someone else’s.”
So, in this short guide, we will be outlining the 6 biggest mistakes that beginner real estate investors make, and, more importantly, how you can avoid them.
Let’s dive in.
Mistake #1: Not Investing in the First Place
“The best thing you can do is the right thing, the next best thing is the wrong thing. The worst thing you can do is nothing” ~Theodore Roosevelt
By far the most common mistake that novice investors make is not investing in the first place!
I can’t tell you how many people I know who have allowed their fear to paralyze them and prevent them from taking action.
They spend hundreds, sometimes thousands of dollars on books, seminars, and courses but, at the end of the day, they fail to take the requisite action and as such, they close no deals, have no cashflow, and build no wealth.
The most common real estate investing mistake is hesitating and procrastinating too long instead of jumping into the game feet first.
Commit today that you will become a real estate investor (if you are not already) and you will learn what you need to learn so that you can take the action that you need to take.
Mistake #2: Investing too Hastily
Conversely, instead of waiting too long to begin investing, many investors jump into the real estate game before mastering the basics of investing.
They don’t take the time to learn how the game is played, understand their local market, or set clear goals and systems for how they will invest their money.
I’ve seen plenty of otherwise fantastic investors who have lost hundreds of thousands of dollars by rushing into things without doing their due diligence.
In real estate investing, it’s all about timing.
You don’t want to wait so long that you fail to invest at all, but you don’t want to rush into large investments without doing your homework either.
Mistake #3: Falling in Love with a Property
If you’ve ever gone to purchase a car, then you know how important it can be to emotionally distance yourself from the purchase.
If you show the dealer that you are 100% sold on the car, then you might walk out of the dealership spending several thousand more dollars than necessary.
Or, if you are buying used, you might jump into a purchase before realizing that the vehicle suffers from a plethora of flaws and problems.
It’s no different in the real estate investing game.
If you fall in love with a specific property, your judgement will be skewed, your ability to negotiate will be hindered, and you will end up making a mistake somewhere in the process.
To become a successful real estate investor, you must remember to never fall in love with one property.
There’s always the next one.
Mistake #4: Haggling with an Unmotivated Seller
One of the biggest mistakes that I see many investors making is that they try to purchase a property from an unmotivated seller.
Can you purchase a property from someone who isn’t actively trying to sell their house? Absolutely!
Is it an effective way to generate real profit and grow your portfolio? Absolutely not!
In order to find the most deeply discounted deals you must find the most highly motivated sellers.
Otherwise, you will be fighting an uphill battle that will likely end with nominal profit margins and a lot of headaches.
Mistake #5: Failing to Have the Property Inspected by Multiple Companies
Having your investment property thoroughly inspected by multiple individuals or companies is not a “good idea”. It’s mandatory.
I’ve seen investors lose $10,000 or more on a deal because they failed to triple check the integrity of the home and were forced to spend exorbitant amounts of money on repairs that should have come out of the previous owner’s wallet.
Before you make an offer on any property, you should have at least 2 (sometimes three or more) home inspectors look at the house for potential issues.
I know that it might cost you a little bit of money up front but it can save you thousands in the long run.
Mistake #6: Coming into the Game with Unrealistic Expectations
Real estate can make you wealthy beyond your wildest dreams
It’s an accessible investing modality that can help anyone, regardless of their background, create real wealth and passive income in a relatively short amount of time.
But to achieve any level of real success in the real estate game takes work. And lots of it.
If you are coming into your real estate journey expecting to become a millionaire overnight or to generate 6-figures in profit without putting in 60 hour work weeks, then you are in for a nasty surprise.
Real estate is one of the most lucrative industries in the world and it’s also one of the toughest.
If you don’t have realistic expectations coming into this game, then you can rest assured that you will fail.
You will burn out, lose thousands of dollars, and resent the “Gurus” and experts who told you that you could make millions overnight.
Can you get rich quick with real estate? Absolutely.
Can anyone get rich easy with real estate? Not a chance.
Investing in real estate can be one of the most lucrative and rewarding experiences for the modern investor.
But it can also be one of the most frustrating.
So learn from our mistakes and take these lessons to heart.
You can create real wealth for yourself and your family if you play this game right and avoid the mistakes that we just shared.
So educate yourself, take massive action, and play the game to win.
What did you think of our blog post? If you have any questions about real estate investing or would like to partner with us on your next deal, don’t hesitate to reach out to us through our contact page!