There are many “What to do” and “Do not” real estate investment. Here are six “don’t do” that I see again and again. They are not too difficult to avoid once you know what to look for.
1. Payment based on future value
Too often, investors rely on the value of a property, regardless of its current market value. Be sure to make offers based on the facts and the value of the house at this time. If you think too much and put too much emphasis on future profit margins, you may be preparing for failure.
2. Stay true to the system
Following a system is excellent and very useful to start investing in real estate. But the key is to improvise in case of a problem. Gurus that focus on their “proven step-by-step system” do not take into account much of the business: problem solving. Investors must be prepared to change and adapt their strategies to adapt to each individual situation. Therefore, don’t get too caught up in a system and give up flexibility.
3. Adjust the numbers
An important hitman is not realistic with math. Overstating ARVs (after repair value) or underestimating repairs is a direct blow to a ruined investment. It is important to always take the time to sit down and run the numbers, otherwise you could destroy your agreement.
4. Be lazy with record keeping
It is essential to keep proper records of property and finances. It is always important to know where you are and analyze past investments. Staying up to date with these records allows you to successfully plan your future investments and facilitate your tax and loan officers.
5. Get fantasy
Sometimes investors get bored with their projects and systems and opt for interesting new offers that do not fit their plan. Unfortunately, it is an easy way to lose everything you have been working for. It is a good idea to find a process that works and stick to it; Do not try to speed up the process and risk everything.
6. More leverage
This is the last most common real estate investment error on our list. Overindebtedness means that you have more debt than your investment properties can maintain. Keeping cash is the only way to stay above water in your investment career.
One of the best suggestions I can make to those of you who wish to participate in real estate investment is to find a mentor. I have said it before and I will say it again “Learn from someone who knows”. If your mentor comes from a friend of a friend or from a local association or simply from someone with whom you are in your local chamber of commerce; Communicate with someone who has been doing this for a while and learn from them.