Welcome to the exciting world of real estate investing. Real estate investment offers plenty of opportunities and risks for the new investor. National real estate investor, entrepreneur and speaker David Dweck shares his "Top Five Mistakes Real Estate Investors Make".
Mistake # 1
THEY FAIL TO GET EDUCATED
Many “newbies” shoot from the hip and don’t invest in their education. Learn more = earn more. Learn from those who have “been there, done that”.
Join BRIC or your local real estate investor association and learn from a network of other real estate investors and professionals. Not just what works — but what fails, too!
Mistake # 2
THEY DON'T INVEST IN THEIR OWN AREA
Don’t invest out of town, invest in an area that’s close and you know. Market knowledge is power, and it will give you the confidence you need when buying property. Do your research and get good comps. Don't be afraid to work with a real estate agent who is a local expert in sale and rental values.
Mistake # 3
THEY DON'T TREAT REAL ESTATE INVESTING LIKE A BUSINESS
If you fail to plan; then you plan to fail. Build a success team with CPA’s, mortgage brokers, handymen, etc. Use proper paperwork such as agreements/documentation. Don’t hold investment property in your name — hold title in a Land Trust or LLC. Always have an exit strategy.
Mistake # 4
NEW INVESTORS OVER-IMPROVE THEIR RENOVATIONS AND DON'T PROPERLY SCREEN TENANTS
Remember, this is not your personal residence — go with the flow of the area. Don’t put Formica in a $500,000 house and don’t put granite in a $200,000 house! Many investors don’t budget properly. If you screen your tenants before they move in, you have a much better chance of having a long-term tenant as opposed to an eviction. Have a good application and use the BRIC lease (available to members in English and Spanish).
Mistake # 5
THEY AREN'T BOLD
Don’t be afraid to make a lot of offers. Think out of the box and remember to be pleasantly persistent! Don't get frustrated and be careful of the "paralysis of analysis"!
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