Real estate investing is the newest, shiny toy in town. Every player in the business of investing wants to be a part of this huge market. With an increasing number of people turning to real estate to maximize profits and make long term investments, or even simply to be able to work commercially in this field, it is easy to make mistakes that could cost you. Not everyone is skilled and trained to be an investor, and you don’t want to make errors in your business that would burn a hole through your own pocket or disappoint your clients.
Jeff Adams believes in educating beginner investors so that they may always stay on track and in this line of business, and make successful deals that would profit them. However, there are some rookie mistakes that beginners make in the real estate arena, and we’d hate if you make them too.
Jeff Adams stresses on exactly what you should avoid as a beginner in the real estate arena.
1. Speculation
Most beginners feel they have the know-how to speculate and invest and end up making no profits. Start small. Start with homes, land and below market properties that will bring in a flow of cash.
2. Getting Your Emotions Involved
Don’t let your emotions drive your decisions. Beginners tend to make impulsive decisions at the very sight of property that looks good from the outside and ignore the necessity to study the details making business out of it.
3. Burning Holes in Your Own Pocket
Real estate investing is an OPM (Other People’s Money) industry. Don’t give away your own money in any deal. You want to be able to have enough saved if a not-so-pleasant surprise come’s your way.
4. Building a Team
Beginners should try to start with DIY principles in this business. There are a lot of hungry investors out there who might try to cheat you with the disguise of being on your side. DIY investors are more successful than teams. Also, it is tough to work with investors who’ve been in the industry as they do not like taking advice from anyone, and are used to working by themselves.
5. Quitting your Day Job
You shouldn’t let real estate investing get in the way of daily tasks. Complete your important daily tasks, and start with treating investing as a part time job. Don’t let investing become your only job, especially if you aren’t sure yet if you’re cut out for it or not. You don’t want to fall hard one day, and find you don’t have a job to help you back up.
6. Underestimating the Importance of Math
Real estate investing is not rocket science. But you cannot deny the fact that it is a numbers’ game. Remember to always work with operating numbers and not potential numbers. Verify all incomes and expenses and you’ll never go wrong.
By avoiding simple mistakes like these, you can prevent huge losses and only grow as an investor in the business of real estate investing.
