5 Common Mistakes to Avoid when Investing in Real Estate
If you are a new or seasoned real estate investor than you will want to read this article. In this article I will discuss some of the most common mistakes that people make when investing in real estate and how you can avoid them.
Common Mistake #1
Going into real estate to get rich quick. This kind of thinking is a huge mistake made by many people today looking for a quick fix to their financial situations. Investing in Real estate is a slow and steady race, it is all about finding deals on a continual basis and keeping deals in the pipeline at all times. Of course as you increase your skill level you will occasionally find a great deal but for now it is important to focus most of your efforts on the more common deals that will lead you to wealth slowly and steadily.
Common Mistake #2
Jumping in with no plan and winging it. There are many course available that advise new investors to "fake it until you make it", telling them to just jump in with no plan at all. This is a huge mistake and could cost you your livelihood, your reputation and your bank account in a quick hurry. I suggest that you at least sit down for an hour or more and think about what you want to see happen. Then write down some realistic goals on how you plan to make these things happen. Only then can you work your plan and succeed. Remember that by failing to plan you are actually planning to fail.
Common Mistake #3
Not building your own team of professionals. Most people getting started in real estate investing think that they can do it all by themselves. What they do not realize is that they need a team to help them along the way so that they can stay focused on money making activities. Make sure that you interview attorneys, real estate agents, mortgage brokers, accountants, title companies and contractors. Take your time and find people that you are comfortable with and that you are confident in their ability to get the job done right.
Common Mistake #4
Not having any cash reserves. Don't ever forget that real estate investing will require money. Not necessarily your money but you will definitely need some cash to make deals happen. You will most likely need cash for unavoidable contingencies that may come up, even if you plan on just flipping houses. Contact your sources early, before making any deals to make sure that you will have the cash available when you need it.
Common Mistake #5
Thinking you know enough. When it comes to real estate investing, as with any other venture, you should be constantly learning and working on your education. You should be doing this as you are taking action though. You don't want to just study all the time and take no action, this will get you nowhere fast. A great way to study new things is to buy audio CDs, that way you can listen while doing other things like driving or making supper to make the most use of your time. You can buy almost any book nowadays in audio format from your local bookstore or online.