Skip to main content

5 Common Real Estate Investing Mistakes of Small Portfolio Owners


Although real estate may seem like a sure bet for anyone, many investors make the same few mistakes. Eliminate these errors from your investing activities and you'll be well on your way to accumulating the wealth you desire.

Avoid These Mistakes


  1. Poor research. Most of us do a lot of research when we plan our vacations or purchase a new television. If you were buying one that was worth 100k, you can bet you’d do even more research! Well, you should be doing that when you purchase a piece of real estate, too.

  2. Inadequate financing. Real estate investors frequently like to wheel and deal, and their deals can have a lot of moving parts. Balloon payments, interest-only payments, owner financing, subject-to, and many others are commonplace.


  • To make a deal happen, we can get carried away doing everything in our power. Getting a great price doesn’t always justify the deal if the financing is inadequate. Are you really sure that you can unload the property or get another financing before that balloon payment comes due?


  1. Trying to do everything yourself. Though every real estate investor attempts this at one time or another, you have little chance at success all by yourself. A great investor will have, at a minimum, a real estate agent, property manager, attorney, title company, inspector, handyman, and insurance agent – all on speed dial. 


  • You may not always need them, but they should already be in place, and you shouldn't hesitate to call them if you do want their services. Use your experts to your full advantage.


  1. Paying too much. This one is certainly related to doing enough research. Real estate deals primarily sink or swim based on price. If you pay too much, not much can be done to rectify the situation. 


  • Beginning investors are more likely to mentally fudge the numbers a little bit to make a deal happen. But if the repairs run high, and the price they can sell for is lower than expected, then overpaying in the first place can be disastrous. Do your research and your math and stick to your numbers.


  1. Not estimating expenses accurately. This is similar to paying too much. Many investors will look at repairs and think to themselves, "Everyone is saying it will take $20,000 to fix, but I'm sure I can get it done for $14,000." But what if it really takes $23,500? That's part of the reason getting the property at the right price is so important.


  • The other aspect of this mistake is not accounting for all expenses. The costs of landscaping, lawn mowing, insurance, utilities, property taxes, and new appliances can really add up in a hurry. Be realistic with your repair planning and take careful notes of all your possible expenses.


Real estate investing is a relatively simple business, but mistakes can create massive challenges in a hurry


Every seasoned investor has made all of these mistakes. The best investors just make them less often than everyone else. In any housing market, there are moneymaking opportunities, so don't let these mistakes slow you down!


Comments

  1. It's an excellent article you've written here about.homeowners association management company Your article provided me with some unique and useful knowledge. Thank you for bringing this post to our attention.

    ReplyDelete

Post a Comment

Popular posts from this blog

5 Baby Steps For Real Estate Agents to Attract Clients!

There is beauty in Real Estate. Specifically, because the population is growing. In Real Estate you can receive a steady income that you can accurately predict and rely on, unlike typical sales roles. To attract the best clients and make the top dollars you have to start with focusing on becoming a top-producing Real Estate Agent. There are a number of books and references on selling but not much available on the topic of attracting a Real Estate clientele. In Real Estate the skill of persuasion is one you must develop. To get started there are 5 baby steps that you must take to begin a career. 1. Read books on influence, persuasion, marketing, and asset management 2. Write down and affirm your success, “I am closing 35 homes per year” 3. Find an agent with a lot of listings you connect with 4. Find a mentor to show you the way 5. Associate with others who are currently successful in Real Estate Getting your Real Estate License can be the better avenue when starting in real estate. ...

3 of the Hottest Marketing Technology Trends That Will Shape Your 2020 Efforts In Real Estate

Have you ever heard of Silicon Valley? Likely you have. Did you know that Silicon Valley is constantly trying to innovate the real estate industry? Technology continues to push the envelope and transform the direction of the profession every year. In 2020 several marketing trends are revolutionizing the real estate profession and most follow the sociological trends from recent years.”Today, people’s attention spans are short and the way they like to consume content has also changed. This is why content formats like Stories have become popular. They are short, engaging, and addictive in a way that people can spend hours scrolling through one Story after another (N.A, 2019).” The many marketing trends of 2019 continue to evolve into 2020 with technology tools designed to improve the customer’s experience. One-Click: Think Amazon! Amazon knows that people want instant one-click to purchase. In fact, “When we write the history of electronic commerce, the 1-Click patent … allowed Ama...