10 Mistakes Real Estate Investors Must Avoid

The real estate industry is filled with challenges, including assessing risks and evaluating the challenges to understanding numerical calculations. At Motivated Leads, we’re committed to helping real estate investors build a great portfolio and make money. Below, we showcase some common mistakes real estate investors must avoid.

1. Getting Into the Business Without Knowledge of Real Estate Investment

Real estate investment is not easy, and investors have to have the patience to learn more about real estate. As a real estate investor, you must research the local real estate market of the past and present. While the internet provides basic information about the process, you’ll need help from a professional for detailed information. Learn more about a typical investor’s time commitment, financial risks, and daily routine to decide if the profession suits you.

2. Getting Into the Business Without an Investment Plan

You must understand the potential benefits and drawbacks of investing in a house. You could also work with someone with experience to learn more about the ins and outs of different real estate investing strategies. For example, the flipping approach suits investors with enough design skills and cash flow to purchase homes outright. Or, if you don’t have enough money, consider real estate crowdfunding.

3. Getting Into the Business Without Learning About the Location

When it comes to real estate investing, location is everything. For example, homes near amenities and transportation facilities sell quickly compared to properties in secluded areas. The target audience also helps decide on the location. Families with young kids prefer homes within walking distance of schools and colleges.

4. Getting Into Business Without Asking the Right Questions

In real estate investment, asking the right questions is essential. Some questions you must ask include:

• Is the property near an industrial site? Is it likely to be so in the near future?
• Is the property in a flood-prone area?
• What are the fundamental structure-related problems in the house? Consider roof issues, foundation problems, and more.
• Does the home have code violations?
• What upgrades have been made, and what is the extent of repairs you still need to make?
• Why is the homeowner selling the house?
• Are there any issues in the neighborhood?

5. Getting Into Business Without Consulting the Experts

While research and cost analysis is important, you need the guidance of experts to ensure the deal goes through smoothly. We work with real estate investors at Motivated Leads, helping them find motivated seller leads through custom campaigns and pay-per-leads. The latter involves getting pre-vetted motivated home seller leads for chosen counties. You can pay for 150 motivated home seller leads or get a customized campaign on Google and Facebook to create and build a brand.

6. Getting Into Business With Cheap Contractors

Real estate investors must pinch every penny and negotiate contracting work to make a profit. While expecting a good deal is normal, you must remember that you only get what you pay for when hiring a contractor.

7. Getting Into Business Without Calculating Your Earnings

You must add gross profits and subtract the total costs to assess earnings. Some factors that make up gross profit include physical assets, realized and unrealized gains, money from the sale, and rental income. Meanwhile, factors that make up costs include advertising costs, real estate fees, closing costs, inspection fees, and other money invested in securing or maintaining the investment property.

Above all, the real estate investor must know when to be aggressive and when to be patient.

While real estate investing is rewarding, you must protect yourself from falling victim to the mistakes mentioned above.