The 23 Most Costly Mistakes That Real Estate Investors Make and How To Avoid Them"
It has been said that experience is the best teacher though I’ve come to realize that if I don’t try to reinvent the wheel and learn from those who have been successful before me, doing the same things that I want to do, I become more successful much faster.
Aside from reading as many books and listening to as many tapes that I can on Real Estate investing, I also ask a lot of questions when i talk to successful real estate investors. The goal is to learn from them to increase my own success and limit the mistakes.
When talking to these individuals, there is one question that I always ask and am most interested to hear their response.
That question is:
“What was the biggest mistake you made when you first started and, looking back, what could you have done to avoid it?”
This question usually invokes a queer smile as these now successful investors look back into their once unstable past and conjure up their biggest folly.
Often times they would not mention just one situation but two or three.
The biggest single quality that each of these investors possess is that when they were stuck by adversity they did not fold up their tent and decide that real estate investing was not for them.
They stuck it out and turned each one of their mistakes into a valuable lesson not to be repeated.
The Japanese have a saying “fall down 6 times, get up 7”. With almost every situation in life, weather it be business, family, relationships, and/or money, if you adopt this attitude you will become unstoppable.
The following 23 mistakes are the most common responses that I received when I asked successful investors to talk about their past.
Read them, study them and don’t forget them. Anybody can receive information, it is the wise man that prospers by it and puts it to use.
1) Waiting Too Long to Start Real Estate Investing
2) Not Having a Plan
3) Not Requiring Written Repair Bids – Every Time
4) Not Charging Tenants for Damage
5) Not Screening Tenants for Eviction Risks
6) Paying for Repair or Construction Before 100% Completion
7) Paying Full Price for Late Repair of Construction
Allowing Your Real Estate Business to Run Your Life
9) Over-Improving a Property Bought to Flip or Rent
10) Running Out of Cash
11) Forgetting About Asset Protection
12) Over-Analyzing Property
13) Becoming Friends with Tenants
14) Underinsuring Property and Risk
15) Ignoring Cash Flow
16) Punishing Bad Tenants Without Rewarding Good Ones
17) Permitting Tenants’ Problems to Spoil the Positives of Real Estate Investment
18) Letting Rent Collections Get Personal
19) Only Looking at Properties When There Is a Problem
20) Missing Out on Special Loan Programs
21) Inability to Sell a Rehab Property or to Rent a Rental Property
22) Not Thinking of Tenants as Potential Buyers
23) Renting to Relatives