Real Estate Investing Mistakes? Ignore below real estate investing mistakes to boost your business. No experience, bad decisions, wrong management can cause bad harm to your real estate investing business.
If you are looking to buy then flip houses or you have a lot of rental property or just selling something, investing in real estate market is appealing if the housing market is good like 2014-2017 due to lower interest rate. But there’s always right way and wrong way invest in properties. Read on below to see real estate investing mistakes people often make which you should now be aware of.
Real Estate Investing Mistakes
15 Real Estate Investing Mistakes To Ignore
1. Assuming real estate investing will make one rich quick.
Always start with correct information and right people even if it means taking up your time. Don’t assume you will be rich quick by flipping some houses, but having said that, you need to start with Pre plans.
2. Neglecting Due Diligence.
This can be your costly mistake and if you make this mistake a habit, you may end up closing your business. Check your bills, invoice, pay on time, pay taxes as needed, but above all, finish complete Due Diligence of the property you are buying. Check if the property has liens etc.
3. Miscalculating cash flow.
My experience says set up twice the cash you thought to maintain any property. If your strategy is to buy, hold and rent out properties, you need sufficient cash flow to cover maintenance.
4. Not teaming with right people.
Yes, this one is very important for the longevity of your business. With wrong people or with people of different skill sets and experience, you will not achieve what you have set for. Its always better to figure out best people for your team.
5. Paying too much.
Of-course, its all about money! That is why due diligence is required so that you offer correct amount for the property so that you profit. And for perfect due diligence, you need right people with right experiences.
6. Not planing ahead.
Always plan before you invest in something. This is true not only for
7. No backup plans.
Many people buy a property and get stuck with it because they have only one exit strategy. They’re going to sell it or they’re going to rent it out. What if it doesn’t sell? What if the rental market stalls? Always have two ways, if not three, to get out of any deal.
8. Minimizing transaction volume.
You are here to do business, so selling 1 home every 3 months is not a business, you need steady property portfolio and many completed successful transactions to be in business.
9. Looking at very few properties.
You need to hunt lots of homes to zero in on some as there shall be stiff competition from other parties too. Real estate market is very competitive and it will become more as there will be more agents, more hi tech software for real estate agents.
10. Rely on Traditional Mortgage Lenders to Finance Deals.
One of the keys to successful real estate investing is having your own rock-solid financing, so that you don’t have to rely on commercial mortgage lender requirements, timelines, and ability to kill a deal. So you need great relationship with multiple vendors
11. Undermine the work involved.
Whole home buying, home selling process can take time very longer that you anticipated. From location hunting to price bargain to loan approval to whole closing process.
12. Poor management.
This point stress same information as in points 2, 4, 6 mentioned. Make sure you have right people means people who can get things done in right way fluently. That saves customers and helps leafless transactions for parties involved.
13. Sell & Buy at the wrong time.
Yes, timing matters a lot. Please check here for more timing related info on real estate business.
14. Not estimating correct.
Double the amount of money and time you have estimated
15. Don’t Treat Your Investors Right.
Loan approval is very critical part of investment real estate. How do you motivate quality investors and private lenders to line up to lend you money? Simple – treat them well.