Most new investors will just go and decide to purchase a property that they hope will appreciate. It is just like a gamble for which they just hand pick stocks and throw it all away to the casino. If you’re new to the real estate investing industry, you should avoid these six mistakes to keep you going.
- Choose not to buy at Market Value– Find deals in any market because there are always distressed properties which you can get for 70% or less of market value.
- Love the deal– Forget about your emotions and find a lot of time to check something that you like. Many beginners for love the deal immediately which makes their emotions drive the decision. You must come up with a list of objective criteria that you can use to evaluate deals that will take the emotion out of your decision. An example would be for example would be to not pay more than 20% below the average of the three best comps Find many prospects that fit the criteria, filter and select the best deal.
- Too much money– Avoid putting too much of your own money into a deal., because what you should do is to minimize your own money in a deal. Make sure you have a lot of reserves to support any unpleasant surprises.
- One exit strategy– Create or learn to have multiple exit strategies to avoid more risks. Buy below market properties that will let your cash flow.
- Buying in Warzones–Make sure there is a strong demand of renters and/or buyers in your chosen area.
- Do Not Forget to consult an expert or build a team– Forget about do-it-yourselfers. Real estate can let you earn more if you have a solid team and experts who are more than willing to give you advice if you’re just starting in this business.
Source: https://www.biggerpockets.com
