How To Avoid 10 Most Common Real Estate Investing Mistakes

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by: simon87
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Date: Fri, 11 Mar 2011 Time: 7:13 AM

A lot of real estate investors fail in their real estate investing business because of common mistakes they can easily avoid.

 We cover the most common real estate investing mistakes  in this article.

1)    Adopting too many business models
 Most students who just attended boot camps or seminars do this.   It is important to learn all the real estate investing strategies, but you cannot adopt all of them at the same time.

The end result is loss of focus, and few to no deals done.  Take one or two business models such as wholesaling, lease options, etc and stick with it.

 When you increase your capacity, you can handle more business models.

If you are a beginner in real estate investing, then you must select one business model work with it and polish it before you move adopt other models.

 It is impossible to target your advertising when you have too many business models.  You are likely to reach nobody with blind marketing when you try to reach everybody.

 When the leads start responding, you are likely to lose most of them in the resulting chaos.

2)    Not having an exit strategy
Before you buy any property, you must know how it will make you money.  If you have not done this, you are likely to make a loss no matter how cheap it is.

The exit strategy is the one that determines how you structure the deal for most profits.   If you have no exit strategy before you buy, you are likely to adopt the wrong strategy and lose money.

3)    Paralysis of analysis
 You can never be 100% careful as much as it is important to be careful. Lots of new real estate investors spend too much time analyzing deals in great detail, leaving time for little else.

 not all deals can work no matter how many strategies you know.

4)    Not telling it like it is
 You will get into trouble with this real easy. You must let the seller or buyer know exactly what to expect.

 This is especially important when you wholesale properties or take them subject to the existing mortgage.

5)    Doing it all yourself
 Even though you need to save money, let professionals do their job. As a real estate investor, you are a business person. You cannot be the closing agent, attorney, contractor, etc.

Concentrate on building your business and let professionals do what they do best.

6)     Doing sloppy work
 This happens when you try to save money or do it all yourself. A house with sloppy repair work is unlikely to attract buyers and will end up making you a loss instead.

7)    Being personally attached
 Finally you have got this beautiful house, you love - so what? As soon as you get personally attached you end up spending too much money on it and make a loss.

 Treat each deal as a dollar figure, and you will be fine.

8)    Not networking with other investors
I have met too many real estate investors in trouble as motivated sellers, but who think they know it all.  Their attitude is, if they are teaching it, shouldn't they be out making money instead of teaching?

 Once you network with other real estate investors, you learn what they do and how they do it.  They are engaged on the ground doing what you do and the know how to do it. You can learn a lot from them.

9)    Not having a dream team
 Build a team of people who deliver the services you need -  title company, attorney, contractors, roofers, plumbers, real estate agents, mortgage brokers, etc.  When you need them they are just a phone call away.

10)    Not assessing yourself
I like to look through each deal when it's complete to see if I could have done better.   This way you can improve with every next deal that you do.
 When you do not repeat past real estate investing mistakes, your business will continue growing.

About the Author

In order to run a success real estate investing business, it is necessary to automate most aspects of your business, increase efficiency so you spend less time, money and effort while closing more deals. A lot of real estate investors have achieved this with database driven real estate investing web sites that also automate most tasks of real estate investing.

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