Real Estate Investing 10 Common Mistakes of New Real Estate Investors Part-I
Real Estate Investing is the greatest wealth builder in history,but it requires a focused plan,determined effort and time.And,like all endeavors,it won't always go as planned.We've all made mistakes.It's just a part of living,trying,and learning.And,it will happen to you as part of your investment career eventually,if it hasn't already.In this two part series you'll learn the 10 common mistakes of new real estate investors.
We've all made mistakes. It's just a part of living, trying, and learning. And, it will happen to you as part of your investment career eventually, if it hasn't already.
Wouldn't it be nice though if you could learn from the mistakes from others?
How much could you save in time, money, and frustration by learning about the most common mistakes in real estate investing.
What would that be worth?
In this two part series you'll learn the 10 common mistakes of new real estate investors. If you're just starting, print this series out. Refer to it often.
If you are already a real estate investor, review this list again. Make sure you don't forget the fundamentals. Your balance sheet will thank you.
1) Not Following Money Rules Have a set of money rules and follow them. Your rules can be as simple as or as complex you like. Just be consistent. Maybe you only want to use a certain amount of leverage on your projects. Or, you want to place no more than 20% of your investable assets in any one project. Whatever your money rules are, work with you advisory team and follow them.
2) Not Consulting with Your Team of Experts Your team is an invaluable asset. Not consulting with your team of experts/advisory team on every investment is a mistake. Your team should include the following resources:
Your Tax StrategistYour Entity Specialist/Attorney (make sure they understand real estate investing)Your Mentors and Coaches.
Successful investors like Sam Zell, Donald Trump, and many more consult with their teams regularly. So why not mimic what successful investors do?
3) Waiting Too Long - Real Estate Investing success, contrary to late night TV hype, requires time. Two things tend to hold back new investors. The first is lack of awareness. The second is fear. If you're reading this post then we can assume that the first issue is taken care of. Fear then is the issue. And fear defined as False Expectations Appearing Real has one universal solution.
Start now. Learn about investment due diligence, risk management, and how to build a stable real estate portfolio. This will help you overcome fear and participate in the best buying opportunity of your life time.
4) No Real Estate Investment Plan A plan is literally a "road map" to achieve your goals. Without a well defined plan, chances are you will skip valuable steps in your property purchase decisions. And, if your plan is not written down, your thoughts are not organized and are aimlessly floating around.
Look at it this way. All successful investors have written explicit plans to achieve their goals. It's that important.After you start using a real estate investment plan consistently you'll find that you'll reach your goals much faster and easier with less stress.
5) Not Purchasing Property for Cash Flow The key component of permanent wealth is cash flow. This is because cash flow from passive investments, from a return quality perspective, is one of the best ways to make money. It has great tax advantages. Your asset is making money for you before you sell it. And, you have a high degree of control over that cash flow stream compared to almost every other investment.
Don't bank on appreciation. No one can predict the future. Cash flow pays you now.
Mistakes 6 through 10 arriving in part 2 next week. Stay tuned.
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ABOUT THE AUTHOR
Dan Chamberlain has a passion for solving complex problems and teaching and mentoring others.As the Director of Operations,Dan oversees 37th Parallels real estate acquisition,renovation, and sales processes in conjunction with managing strategic internal projects.This includes working with field partners in 5 different states and across several different disciplines.