The only real solution for real estate investing mistakes is consistent action! You’ve got to stick with it and realize that part of learning process. You WILL make mistakes… and you will continue to make them for as long as you choose to invest.

The key is to learn from each and move on. Add it to a policy and procedure manual so to speak! And avoid that particular real estate investing mistake in the future!

When I first started in real estate, I would document every real estate deal in detail. I would be sure to document: (1) What went well, (2) What didn’t go well!, and (3) How to improve on the next deal.

In this article series, I’ve highlighted 17 mistakes that I made early on and share with you what you can do to avoid making the same real estate investing mistakes I made… (You can get all 17 real estate investing mistakes here)

Real Estate Investing Mistake #2: Assuming the repairs and maintenance

This is a biggie early on for real estate investors. They assume that properties have been maintained and/or that the owner is telling them the “whole story” about everything. I know that some will tell you it’s a waste of time and money to have inspections done on all of your deals.

When I got started in real estate investing, I primarily rehabbed properties, and because I had ZERO construction knowledge going into it all, I had a formal inspection on every single property I purchase. And without fail, 100% of the time, I made the inspection costs back in renegotiations with the homeowner.

Think of your home inspection costs early on as a invaluable education! People will spend 10s of 1000s of dollars on home study courses, but will balk at $200 on a home inspector that will literally give you on the job training.

On my very first deal, I assumed that everything was in good working order because I knew the owners. They were related to my business partner! Well, needless to say, I was VERY wrong! Fortunately, things worked out in the end, but this “mistake” SHOULD have cost me nearly $5000. And it was something a home inspector would have easily caught!

Sure the obvious stuff stood out on this real estate deal… things like the rotted wood siding and the “pond scum green” pool! But I didn’t know the first thing about what to look for in terms of plumbing, roof, electric, structure, etc.

How to Avoid Real Estate Investing Mistake #2

First and foremost, the key to avoiding this real estate mistake is to LEARN the majors of rehab! These include:

1. Roof
2. Structure (Including the foundation)
3. Electrical
4. Plumbing
5. HVAC (Heating, ventilation, and air conditioner)

These are the items that can cost you (or your retail buyer) BIG dollars on a deal… and these are things that will make or break a deal in a matter of minutes. In some cases, they can take you right out of the real estate investing game (Keep an eye out for case studies as a new series here on www.RealEstateTrainingAcademy.com). These are things that can literally make or break a deal and you certainly don’t want to turn into a motivated seller yourself!

These items might seem scary when you’re first getting started in real estate, but in reality, a little education goes a long way. And the best type of education is hands-on. I asked questions and got involved. I also worked closely with my home inspector as I took on more and more rehabs in the beginning of my career.

After I negotiated the contract, I always got a professional inspection. This has earned me thousands and thousands of dollars in my real estate investing career. After simply having a third-party expert do the inspection, I found it’s virtually always possible to renegotiate the price of the contract and receive credit for repairs.

To use this article on your own website, please include the following: To Avoid Making the 17 Most Common Mistakes Real Estate Investors Make, Claim Your FREE eGuide Entitled: “17 Mistakes New Real Estate Investors Make” at http://www.RealEstateTrainingAcademy.com/Mistakes. Inside, you’ll learn the 17 most common mistakes and, more importantly, how to avoid them!

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When I first got started in real estate investing, I was the poster child for mistakes! The one thing I did PROPERLY was that I took action. And success favors the people that take action.

The key is to keep moving and not dwell on each individual real estate investing mistake that you make, especially early on! Just keep on going… and take a few minutes to figure out what the lesson was, add it to your knowledge and experience bank, and move on to the next!

In this article series, I’ve highlighted 17 real estate investing mistakes that I made early on and share with you what you can do to avoid making the same real estate investing mistakes I made…

The first mistake new real estate investors make is always thinking the grass is greener on the other side! That “another” market will have better deals, more motivated sellers, and more qualified buyers. Once your business is established with duplicatable systems in place, it can be easy to expand into additional markets. But in the beginning, stick with your targeted farm area.

Mistake #1: Working outside of your farm area

The first property I ever bought was 4 hours away! I was living in Miami, Florida and the property was located in a bedroom community between Orlando and Daytona Beach.

This was about 4 ½ hours away!

You really want your first deals to be close enough to home where you can manage the deal from start to finish. This doesn’t matter if you’re wholesaling, rehabbing or acquiring a rental portfolio. Obviously, wholesale deals are someone easier to do virtually.

Take some time to figure out your tolerance threshold and how involved you need to be in the deal. Although it doesn’t have to be in your backyard literally, you probably don’t want to be driving 4 ½ hours to meet with the homeowner, show the property potential buyers, deal with contractors and handymen, etc.

You might be surprised just how many deals you can find within a 20-mile radius! (after my first deal, I did about a dozen properties in my first year in ONE neighborhood!).

How to Avoid Real Estate Investing Mistake #1

The solution is simple!

Target a specific farm area close by and work it in depth.

Sure, I know YOUR market is probably saturated and that there are no deals left. (wink wink!). But here’s a secret — everyone says that about their own market!

The grass is always greener on the other side.

When I was full time in rehabbing, I would REGULARLY close deals that had $20,000 – $40,000+ in profits month in and month out.

Thank goodness my market was saturated with other investors!

A side note about finding deals close to home…

1. Choose a target market, a TYPE OF SELLER to focus on (foreclosures, absentee owners, divorcees, expired listings, etc.)
2. Choose a communication method (direct mail, driving for dollars, advertising, etc.). Direct mail is not a target; it is a method of communication.
3. Choose an exit strategy (wholesale, retail, rental). Again, this is what you are going to do with your deals; it’s not a focus.

Don’t get caught up looking for greener pastures somewhere else. You will be surprised what’s available in your own backyard. If you’re looking elsewhere, you’re likely just procrastinating and making excuses.

And I’ll leave you with one of my favorite quotes: “You can choose to make money or you can choose to make excuses, but you can’t choose both, so stop procrastinating and choose one! “

To use this article on your own website, include the following: To Avoid Making the 17 Most Common Mistakes Real Estate Investors Make, Claim Your FREE eGuide Entitled: “17 Mistakes New Real Estate Investors Make” at http://www.RealEstateTrainingAcademy.com/Mistakes. Inside, you’ll learn the 17 most common mistakes and, more importantly, how to avoid them!

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Real estate investing is exciting when you’re just getting started. Real estate is all you can think about and all you can talk about. Your enthusiasm rubs off on others and you instantly start attracting people that want to lend money on for deals, partner with you on properties, joint venture with you on aspects of your business, etc.

The problem is that when you’re so excited, it’s hard to imagine anything EVER going wrong. Why would you need anything more than a handshake and verbal agreement?

Sure, you may be laughing as you read this, but you’ll see… when it comes time to putting a joint venture together, you’ll be eager to get moving along and you just might make this critical real estate investing mistake… and it COULD wind up costing you tens of thousands of dollars, friendships, and worse.

I once heard an attorney approach real estate investing joint venture agreements in terms of marriage… He said, “Plan the divorce before you get married”! It sounds morbid, but the advice is sound (I know from PERSONAL experience… and not ONCE, but several times!). It’s really funny to see what happens to people when money and stress are involved!

In this article series, I’ve highlighted 17 mistakes that I made early on and share with you what you can do to avoid making the same real estate investing mistakes I made… (Get all 17 real estate investing mistakes)

Mistake #2: Not having joint venture agreements in place with partners

I remember reading a book in which the author talked about partnerships and recommended against them.

Shortly thereafter, a mentor, coach, and friend warned me against partnerships, one in particular with my best friend at the time.

However, I thought my circumstances were different and that I could handle my “partnership” in my first rehab project. I was so wrong! In a short time, my partner and I were at each other’s throats.

We ruined both our business and our friendship. We didn’t have the same expectations. We didn’t have the same thoughts on things. We didn’t handle finances the same way… We just really didn’t lay the groundwork properly and made every mistake you could imagine!

How to Avoid Real Estate Investing Mistake #7

What I learned later was that “partnerships” by nature rarely work.

The better your friendship or relationship is, the worse it will turn out in the end.

Instead, look at the alternative of building many joint ventures. This enables you to do projects on a deal-by-deal basis. You do a deal, if it works out, you do another and another and so on.

That way, you’re not bound by a “partnership” and you’re not obligated to each other’s personal finances. When you outgrow the relationship, you simply move on to new joint ventures.

Realize that there will never be true equality in a business partnership, so protect yourself and your “would-be” partner by setting up joint ventures instead.

It will save business relationships and friendships.

To use this article on your own website, include the following: To Avoid Making the 17 Most Common Mistakes Real Estate Investors Make, Claim Your FREE eGuide Entitled: “17 Mistakes New Real Estate Investors Make” at http://www.RealEstateTrainingAcademy.com/Mistakes. Inside, you’ll learn the 17 most common mistakes and, more importantly, how to avoid them!

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