Real Estate

Real Estate



Mistake # 1. Spending thousands of​ dollars buying books, tapes and​ attending seminars and​ then putting all of​ that information on a​ bookshelf and​ never looking at​ (or using) it. Comment: i am continually amazed at​ the​ number of​ "would be" investors who have spent a​ bundle of​ money attending seminars, getting an​ education and​ then never using it​ to​ start their investment program. Not only is​ it​ a​ waste of​ thousand of​ dollars but it​ could be the​ biggest financial mistake you can make.
Twelve Deadly Mistakes Real Estate Investors Make and​ How You Can and​ Must Avoid Making Them

Mistake # 2. Failure to​ learn the​ basics of​ real estate investing. Comment: the​ other extreme to​ Number 1 above, are potential investors who realize real estate is​ the​ best way to​ accumulate wealth and​ venture into the​ purchase of​ properties without knowing the​ basics of​ real estate investing. Those investors are certain to​ get into financial trouble.

Mistake # 3. Fear of​ making a​ huge financial mistake Comment: they all fear making mistakes, especially a​ large financial one. if​ you follow the​ advice in​ Number 2 above, you won't have to​ worry about making a​ financial mistake.

Mistake # 4. Not looking at​ properties Comment: Don't fall in​ love with the​ first property you look at. lots of​ investors buy properties because they "look nice" or​ they are to​ lazy to​ see what else is​ currently on the​ market that may be better. Part of​ sound real estate investing is​ in​ giving yourself a​ choice so you can select the​ best one, financially.

Mistake # 5. "A better deal may be around the​ corner" syndrome Comment: This is​ the​ opposite mistake of​ Number 4. This investor never starts his or​ her real estate investment program because they always hope a​ better deal may be out there somewhere if​ they wait...and wait...and wait.


Mistake # 6. Thinking that real estate investing is​ strictly a​ complicated game that only the​ wealthy can play. Comment: First of​ all real estate isn't complicated if​ you learn how to​ do it​ first. Did you know that even professional investors use a​ simple nine step process to​ analyze the​ financial feasibility of​ an​ investment property?
Here's a​ brief idea of​ the​ nine simple steps they use in​ analyzing any type or​ size investment property. a​ Basic Financial Property Analysis 1. Scheduled Gross Income (Income if​ 100% leased) 2. Less: Allowance for​ vacancies 3. Operating Income before expense & Mtg. Pmts. 4. Less Operating Expenses (Taxes, insurance, utilities, repairs and​ maintenance etc.) 5. Equals: Operating Income (Income before Mtg. Pmts.) 6. Minus: Mortgage Payments 7. Equals money Flow 8. Plus: Mortgage Principle Payment 9. Total Return there is​ a​ lot more to​ it​ than that, but you read the​ basic nine step procedure most professional investors use when analyzing any income producing investment property.


Mistake # 7. Falling in​ love with a​ property Comment: two times you get your feet wet and​ become a​ real estate investor, you'll wonder why you waited so long to​ begin. Now you'll face another problem. lots of​ investors fall in​ love with their property. they've seen how well it​ is​ doing, money flow has been going up each year, and​ they've fallen in​ love with their tenants (not literally). two big mistakes are made here. First, never fool yourself into thinking your property is​ doing well to​ sell or​ trade up because your money flow is​ considerably higher than when you purchased the​ property.

The second part of​ mistake number 7 is​ getting so friendly with your tenants that you fail to​ maintain rental standards based on what the​ market will bear. This greatly hinders your growth potential.

Mistake # 8. Failure to​ plan your financial goals Comment: Before you purchase that first property, which, of​ course, you financially analyzed, determine what you expect from your investments...your financial goals. it​ is​ known as​ "The 'time vs. money'" concept. the​ more you have of​ one the​ less you need of​ the​ other in​ order to​ reach your financial goals.

Mistake # 9. Trying to​ purchase properties that the​ seller isn't motivated to​ sell Comment: i have seen potential buyers continually try to​ purchase investment properties that are not on the​ market. This includes property owners with the​ attitude that "Sure, it​ is​ for​ sale... for​ a​ price". Unfortunately the​ 'for a​ price' part usually means it​ will make no financial sense for​ a​ buyer.


Mistake # 10. Believing you can get rich rapid overnight with no money invested of​ your own. Comment:. Getting rich overnight won't happen . . . (regardless of​ what a​ number of​ the​ so called "experts" tell you). it​ takes some time, effort and​ knowledge of​ real estate investing to​ do it​ with maximum financial risk. the​ important thing to​ remember is​ that YOU can do it, . You can join the​ millions of​ investors who generate sizable incomes by investing in​ real estate.

Mistake # 11. No money down investing usually isn't. Comment: Somewhere, somehow there will be some money required to​ put a​ transaction together and​ make it​ profitable. it​ may be closing costs, repairs or​ upgrading, whatever. But somewhere, some money will be needed. there's ways around this problem without getting into a​ high risk situation. You may be able to​ finance every dollar you need, but it​ can come back to​ haunt you in​ the​ form of​ mortgage payments you can't afford to​ make. Again, learn what you are doing first.


Mistake # 12. Not financially analyzing a​ potential investment property. Comment: This is​ the​ most serious mistake an​ investor, or​ potential investor, can make. i have seen a​ few pros in​ the​ business rely on a​ "worthless and​ inaccurate" rule of​ thumb to​ make a​ huge financial decision to​ purchase, with total disregard for​ how well the​ property will perform.

Oh, yes, there is​ one more major mistake lots of​ investor make:

Mistake # 13. Thinking it​ is​ important to​ pay off your mortgage as​ soon as​ you can because mortgages are a​ 'necessary evil'.


Comment: First of​ all as​ a​ real estate investor, mortgages are nice and​ not a​ necessary evil. You must learn why this is​ true. You must learn how, in​ the​ right situation, a​ second or​ third mortgage can be a​ nice thing. Second: mortgages are one of​ the​ keys to​ generating wealth in​ real estate. You must learn how to​ use financing as​ one of​ the​ keys to​ generating your own financial estate, without concern for​ it​ being "risky".




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