By Dennis Henson
There are more new investors getting into the real estate market today than ever before. Most are unaware of the pitfalls that await them at every turn. By learning to avoid the killer mistakes, your real estate investing business can become a very profitable endeavor.“You don’t tug on Superman’s cape!” *
#1 Failing to get the best help (and education)
The first three members of your real estate team are the most critical. Lots of investors lose thousands of dollars because they don’t want to spend a few dollars on a good local mentor. A good mentor who really knows the ropes is not an expense but an asset. A good mentor will save many times their cost by helping avoid expensive errors. Second is a good real estate attorney to keep you in line with the law and you will need a good CPA to help structure your business. Leave out or choose the wrong one for any of these and it could cost you dearly.
Many intelligent offers are required in order to purchase one good deal. It takes time and patience to land one of those deals. Be patient because if you ever get in a hurry you are probably going to make the next big mistake…
#3 Paying too much
Anyone can purchase real estate anytime. The MLS is full of properties for sale but your goal should be to buy property at a substantial discount. A big enough discount to ensure that you make a good return on your time, effort and money.
#4 Believing the TV commercials(and quitting your job)
Does listening to those guys on T.V. talk about how easy it is to make a fortune in real estate with no money, no credit and little or no work really get your blood flowing? If it were really that easy–everyone would be quitting their jobs to start investing in real estate. Investing is a great business but to become successful you need money, credit, and or a great deal of hard work mixed with a good education. Cash flow might not be very good at first so keep your day job!
#5 Failing to do the proper research
There is a certain amount of research that every investor must do before placing an offer on a piece of real estate. For example—the true value of the property must be determined in advance and you must know what it will cost to hold and get the property ready to market. It is critical that you know all the important answers before you ever make an offer on any property.
#6 Not continually searching for money
The life blood in real estate investing is money. Investors must have access to a lot of money or all their efforts to find good deals will accomplish very little. It takes three things to start a fire, oxygen, fuel and ignition and it also takes three things to build a glowing real estate business, money, good deals, and energy. Remove any of these elements and your fire will go out.
#7 Not bidding consistently
The fuel of real estate investing is good deals and to get a really good deal you have to make many intelligent offers. In order to grow the business–consistent bidding is absolutely necessary.
#8 Doing your own rehab
Rehabbing a property yourself– is not the best use of your time. Successful investors spend their time finding good deals and not driving nails. Sure–it’s fun to fix up something that was in poor condition. The feeling of accomplishment is great but that feeling can be very expensive. That time could be spent finding other great deals and finding money to make the deals work. If you do the rehab yourself you will probably spend more money getting things just right. It is much cheaper to pay a professional to do the job and keep busy doing your job which is finding good deals.* Phrase from the song “You Don’t Mess Around With Jim” as recorded by Jim Croce.
I hope this article will help you in your quest to build wealth through real estate investing. For more articles on real estate investor training, visit my website atwww.dennisjhenson.com. Also on that site, you may sign up for free reports, articles, and e-books and find free forms, documents, MP3 downloads and much more.