Ten Mistakes Investors Make and How to Avoid Them

Series 1

1)          Lack of Preparation and Research: You should never put your money into something without knowing what you are getting, where you are going and what you want out of it. First you have to be clear on your objectives, what you want to achieve and where you see yourself 10-15 years from now. Set goals and makes plans on how to achieve them. you need to know what you are buying, why you are buying and what you are going to do with it. Are you investing for short-term, mid-term or long-term? Too many people set out to flip a property without any idea where they are going with it. This is a get rich quick strategy. While fortunes are being made in Real Estate, it is not a get rich quick scheme. It requires time, dedication and effort. 90% of your time will be spent on locating and puchasing the property: researching, viewing, negotiating and more researching. Remember, most of the money is made when the property is bough. A word of caution: don't take too long to analyze a deal. Good deals don't wait around for indecisive people.

2)         Expecting to Always Win: When it comes to Real Estate Investment, you are not always going to win. When you calculate cash flow, appreciation, loan reduction and tax benefits, having a negative cash flow is not necessarily bad. In the short-term you can have negative cash flow, but have a substantial return long-term on your investment. Whether you are looking at your first property or your tenth, you need to stay committed until the end. You have to keep your goals in mind and stick with your plan. Don't quit, but also be disciplined and don't jump from one idea to another. Write down your goals, and get the support of others. It could be a RE professional, a mentor, or a friend.

3)        Thinking That Real Estate Investments are Only for the Rich: RE investments are not limited to those with endless reserves of money. You can buy a property with little or no money of your own. There are many ways where you can use other people's money (OPM) to buy property: seller finances, banks, private investors, partners, etc. Sometimes you may have to pay a higher interest rate, higher points and higher monthly payments. If it is a good deal it doesn't matter, provided you figure out the dollars and cents before you get started. Investing in Real Estate is a business. Make sure you treat it as a business and your investment will pay off in the long run.

If you would like to learn more about mistakes investors make purchase my new book The Smart Real Estate Investor’s Guide: Your Road Map To Wealth In Any Economy.