Scott Prephan discusses some of the common mistakes people make when investing in real estate and the smart choices you can make instead.

1. 5 Mistakes to
Avoid as a Real
Estate Investor

2. 1. Overpaying
for a property.

3. If you’re turning to real estate
investment as a means to generate
wealth, the last thing that you
want to do is overpay for your
investment properties. If you’re
unsure of the value of your
property or feel that you may have
been misquoted, look for a second
opinion on costs and always be
vigilant for mistakes in property
analysis.

4. 2. Not doing
your homework.

5. The skill and acumen required to
become a knowledgeable real
estate investor takes time to learn,
and it’s not the kind of learning you
can just pick up as you go. Prior to
making any financial decisions
that could drastically impact your
future, educate yourself on the
process and ensure that you’re
well-versed in what needs to
happen on your end by staying up-
to-date with industry happenings.

6. 3. Trying to do it
all by yourself.

7. It’s crucial to build relationships
with all of the right people along
your way; real estate agents and
home inspectors are people you
want to get to know at the
beginning to help assist you with
your purchase. Then, as you begin
the renovation process, it will be
crucial that you form relationships
with people working in
construction, maintenance, and
remodeling companies as well as
the plumbers, contractors, roofers,
and painters that they provide you
access to.

8. 4. Being
unrealistic
about your
cash flow.

9. Yes, if you invest in a rental
property, you’re going to have cash
flow from rent, but there’s more
that goes into it. If you own a rental
property, you’re still responsible
for making payments on it even
when the property is vacant.
You’re also responsible for all of
the upkeep and maintenance work
which can take a lot of your time,
and if you hire a property manager
to look after the property, you’re
also going to be cutting into your
cash flow.

10. 5. Setting
unrealistic
money &
personal goals.

11. Investing in real estate is not going
to make you millions of dollars
overnight, and if you walk into
investing with the mindset that it
will, you’re going to find yourself in
a world of financial trouble. If you
want an investment that’s going to
make you money without much
effort on your part, you may want
to consider another avenue.
Investing in real estate requires a
lot of work on the part of the
individual as well as an adequate
understanding of industry
knowledge.