Mistakes Made by the Notice Real Estate Investors
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Mistakes Made by the Notice Real Estate Investors

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Real Estate Investors Check out this site: http://tinyurl.com/7qzt3mr

Real Estate Investors Check out this site: http://tinyurl.com/7qzt3mr

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Mistakes Made by the Notice Real Estate Investors Mistakes Made by the Notice Real Estate Investors Document Transcript

  • ==== ====Check out this link for Real Estate Investors:http://tinyurl.com/7qzt3mr==== ====As a real estate investor and advisor, I often see novice investors make the same exact mistakes.As a result, I decided to create the following list to help novices understand what these commonmistakes are and how to avoid them. The good news is that all of these mistakes can be easilycorrected. The bad news is that any one of these mistakes will seriously limit your potential forsuccess. In my experience, these are the 9 most common mistakes I see novice real estateinvestors make:1) Not getting an educationGetting an education is a critical part of becoming a successful real estate investor. Its mucheasier and less costly to educate yourself than to make mistakes in the real world. We are luckyto live in a country full of educational opportunities for whichever endeavor we want to pursue.Surprisingly though, not everyone takes the initiative to learn before they take action. Thisexposes these people to costly (and sometimes career-ending) mistakes that could have easilybeen avoided. Some misguided people even complain that the books, courses, or seminarspromoted by real estate experts are too expensive. I guess that depends on where you stand. Tome, they seem cheap compared to what I know can be earned in this business. Perhaps to anovice though, they may seem expensive. But as the saying goes, "If you think education isexpensive, try ignorance." Think about it. Is a $500 course worth it if what you learn only makesyou $5,000 on a single wholesale deal? What if it could save you a mere $5,000 on a singlerehab? Or what if it helped you create an extra $200 per month cash flow on a single property forjust one year? Would it be worth it to you? The value of an education often doesnt reveal itselfuntil youve stepped up to the plate and put yourself in the game.2) Not getting an education from the right peopleThe internet is a great tool. But its also saturated with too much information - good and bad.Oftentimes, from less than credible sources. So dont confuse the information you find on theinternet as neccessarily being quality information. For example, there are a number of real estateinvesting newsgroups and blogs that have proliferated the internet. Many so called experts onthese sites are more than willing to share enough information to get you into trouble. Do you reallywant to get your information from "rei-man-TX" or "investor-guy75?" Carefully consider whetherthese are truly reputable sources to be obtaining information from. I cant believe some of themisinformation Ive seen posted on these sites. Remember, anyone can post on a newsgroup andanyone can create a blog. But just because someone has a blog, doesnt mean they necessarilyknow what theyre talking about. The misinformation you get may be costly...in either lost profitsor reputation.Novice investors may also get misinformation from friends or family members. Perhaps they
  • dabbled in real estate at one point. Now they feel entitled to tell you what little they may knowabout real estate investing. Be extremely wary of people who have "dabbled" in anything.Dabblers are rarely experts in anything. As the saying goes, "Jack of all trades, master ofnothing."3) Not taking actionIf youve managed to get a good education from a good source, the next step is to take someaction. Knowledge is only power once you begin to apply it properly. Merely buying a wide arrayof real estate investing products or attending bootcamps isnt going to make you any money.Some novices neglect to take action because theyre still searching for that magical secret that isgoing to make it start raining deals. The real secret is hard work! Others are paralyzed by fear ofwhat might happen if they get one of their offers accepted. Or, they may give up making offers ifthey dont experience instant success. Whatever the reason, not taking consistent action is a sureway to fail at anything. Personally, I believe that initial failure is the universes way of forcing us tomake sure we truly want what were pursuing. In the end, persistence is what leads to success.And the more we persist, the closer we get to success.Many novices regularly attend their local real estate clubs. Clubs and associations are excellentway to network with other like-mided people, learn techniques and strategies, and have fun.Unfortunately, Ive met countless club goers who have never done a deal before. Instead of usingthe club as a spring board into taking action, they tend to use the club as a warm blanket becausethey fear being out on their own. When I meet these people, my advice to them is to stop sittingaround with the other novices talking about all the deals they would like to be doing. My advice issimple, go out there and get some deals done. We all need a good education. But that is only onestep in the process. There is no substitute for hard work.4) Not having realistic expectationsMost novice real estate investors have unrealistic expectations. It may be about the amount ofrepairs a property needs, the time it takes to complete a project, or the profit they should get froma deal. Theyre expectations are either too high or too low. If theyre wholesaling properties, theymay get too greedy and try to charge the rehabber too much. If theyre rehabbing properties, theymay underestimate the repairs required. If theyre landlording, they may underestimate theamount of maintenance a property will require or forget to factor in vacancies. While getting aneducation plays a large role in these mistakes, another reason is that they did not leave enoughroom for error. They assumed everything would go as planned. Real estate deals rarely goexactly as planned. Experienced investors understand the importance of planning for theunexpected. This way, when things dont go as planned its not the end of the world.5) Not treating real estate investing as a businessContrary to popular belief, real estate investing is not like the stock market. It is not a passiveinvestment. It is an active investment. Whether a novice investors intentions are to flip or to ownrentals, they sometimes think owning real estate is going to be a lot easier than it is. While theprofit potential in real estate is usually much greater than owning a stock, it inherently requiresmore effort than most passive types of investments. Whether youre wholesaling, rehabbing, orlandlording, real estate requires your time and constant attention. In this way, its more like a
  • business than an investment. For example, you must be disciplined about your business. Youneed to set a schedule for yourself and stick to it. You need to set policies and procedures andadhere to them. You need to set goals and do whatever you can to achieve them. Not everyonehas that level of discipline without a boss telling them what to do. When you run your ownbusiness, you are the boss. You must be willing to make sacrifices to succeed. For you this mightmean that you need to turn off the television and read your home-study courses. It might meanthat instead of spending money on new clothes, you invest that money in your business. Or itmight mean that instead of going to the park on Saturday you search the MLS, look at properties,and familiarize yourself with your target neighborhoods.6) Not being patientIt can take awhile for novice investors to see positive results when starting out. You cant expectto immediately find deals and make money. It may take several months to get your first deal. Asa comparison, new real estate agents are often told by their brokers that it may take up to sixmonths to close their first transaction. Similarly, real estate investors should expect to wait a fewmonths to close their first transaction. Furthermore, it can take years for your real estate investingbusiness to become a thriving venture. There arent too many businesses that become profitableimmediately - no matter the type of business. It often takes several years for most businesses toget to a point where they make steady and reliable profits. Running your own business can be funand extremely rewarding. But rest assured, the early years can be unpredictable. As a result, youneed to have a lot of patience for things to take off.7) Not concentrating on quality dealsThis is one of the biggest mistakes I see novice investors make, especially after they have done afew deals. After they have some success, they begin to focus too much on quantity instead ofdoing quality deals. This mindset leads them to do less profitable deals. And once an investorbegins to do thinner deals for the sake of doing more deals and outdoing their competition, theyeventually find themselves in trouble. For example, I know many wholesalers and rehabbers whobecame too confident before the housing downturn of 2006 and loaded up on properties. Whenthe market went south, these investors were left holding a lot of worthless inventory. Most ofthese investors went bankrupt and lost all of their properties. Unfortunately, this is a lesson thatmost investors learn the hard way. For some reason, avoiding the temptation to focus on quantityis a principle that most investors have a hard time accepting. Their natural inclination is to domore. They might feel the pressure to tell their friends what new project theyre working on. Theymight feel bored unless theyre working on something new. Or they might feel guilty about not"staying busy." Whatever the reason, novices must learn that investing is an activity in which"staying busy" is not always smart. Sometimes, the best deals are the ones you dont do. Whenan investor learns to concentrate on a small number of quality deals, they enjoy not only betterprofits, but also a better lifestyle since theyre not running around managing a huge portfolio ofproperties. For most people, the whole point of getting into real estate investing in the first place isto live a better quality of life, not to work longer and harder.8) Not moving on from bad deals fast enoughSince novice real investors usually dont have a steady stream of leads coming in and dont knowwhat a truly profitable deal looks like, they tend to overanalyze bad deals far too long. They get
  • anxious and want to get deals done. And even when they put the numbers of the deal into theirspreadsheet and see the deal clearly doesnt work, they still find a reason to justify it. Theylogically know that a deal should be avoided, but they try to justify it anyway. While I believeeveryone needs to start somewhere, the ideal place for a novice real estate investor to start is in agood deal not a bad one. What novices eventually learn is that not too long after taking on amarginal deal, a greatdeal is not far behind. But because theyve tied up their resources with themarginal deal, they cant pursue the great deal.9) Not writing down goalsDont try to run your business without a clear plan. Clarify your goals by committing them towriting. Then, revisit them once a week until they become reality. Something magical happenswhen you write down your goals on paper. They begin to take root. When you focus on themrepeatedly, you nurture them and they begin to grow. Its important to write down your purpose,strategies, and goals. Begin by asking yourself the following questions:What strategy am I pursuing?What will I do with the properties I will buy?How many deals per year will I do?How much profit will I earn per deal?How many offers do I make to make this happen?What kind of life do I want to live outside of the office?When youre clear about your goals, you have a much easier time accomplishing them. And ifyour goals are unrealistic you should change them as neccessary. Dont get stuck in anunrealistic set of goals that will only produce frustration. At the same time, you shouldnt changeyour goals too often either. Its hard to hit a moving target. You want to strike a good balancebetween having reasonable, achieveable goals and also setting goals that will force you to getoutside your comfort zone.Alex Everest, Founder and President of Deal Maker Library ( http://www.dealmakerlibrary.com ), isa nationally known real estate investor, author, speaker, and advisor from Minneapolis, Minnesota.He specializes in the areas of wholesaling, rehabbing, owner financing, and land trusts forresidential real estate.Since 2004, Alex has been involved in over 300 real estate transactions totaling more than$45,000,000 in market value in which he negotiated, bought, and sold properties in need ofrehabilitation.Alex earned a Bachelors of Science in Business from The University of Minnesota in 1999. He isalso an associate member of the American Bar Association. Alex has authored books, home studycourses, and published articles on the topic of real estate investing.Alexs unique front-line real estate investing experience in hot and soft markets brings a fresh newperspective to real estate investing education. As a result, Deal Maker Library is one of thecountrys fastest growing real estate investing education companies. It provides educational
  • products and services to beginner and experienced real estate investors in the United States andCanada.Article Source:http://EzineArticles.com/?expert=Alex_Everest==== ====Check out this link for Real Estate Investors:http://tinyurl.com/7qzt3mr==== ====