10 Mistakes Investors Make

Ten Common Mistakes of the New Investor

Low interest rates, buyer incentive programs, real estate investment classes and courses available online and on TV are among the reasons. Not since the building boom of the 1950s has there been as much excitement and activity in the real estate market. People all over the country are lining up to cash in on this latest boom. This is an exciting time to own real estate-the price is right and the opportunity to really diversify and use real estate earnings abounds. While many are flocking to this new area of real estate investment, as evidenced by all of the late night TV ads- few are making the money and opportunities really pay off in the long term.

Why? Simple mistakes and poor planning of investment strategy. As an investor and consultant with over ten years experience in real estate investment, it has been amazing to experience the trends and see and learn from the players that have true staying power in the field. Some are coming from the Infomercial set, but many are coming from a tried and true grassroots effort to make real estate investment work for more than just the short-term get rich quick perspective. My own experience has been full of both success, and the struggle of losing money in deals. From these experiences, I have learned that there are too good to be true moments, as well as the sweat busters that this business is made.

On this road, I have met many investors that could only be described as half-hearted and not in the business for the long haul- not because they do not want to make money or be a success-but because the reality of this business is that it takes more than a prescribed by the book approach to longevity and true success. The fact is that it takes more than just the tapes, or a few classes to make this beast work. Many come into real estate investment armed with good intentions, but without a true understanding of what it takes to make the deals work for them.

I liken it to the training it takes to become a doctor or dentist- Would you go to one that learned their trade off of a TV infomercial ? or would you rather have your root canal done by a Harvard professional with years of training and experience under his or her belt? Now, don't get me wrong- you certainly do not need a Harvard degree, or an extensive amount of training to go into real estate investment. That is the beauty of the business. But, you do need to understand the complexities of what you undertake when you have made the decision to go into the investment business, or you will get burned.

This business has taught me a great deal about the way to go about attaining true success and fulfillment using a very simple and realistic approach to investment. As I mentor and train new investors, I have listened and watched as they have triumphed, gone broke, or missed opportunities to grow and earn more money through their investment deals. What resounds for me most as I continue this work is that sometimes the simplest truths are hidden the deepest from us. I have come up with ten common mistakes that new investors-and yes even us old timers- can make in trying to make real estate investment work.

1. Paralysis of analysis You know? The person who attends every seminar, yet hasn't done a deal yet!

2. Over analysis of potential deals Stop looking for the perfect deal. Every deal is a risk. Learn how to make your risk minimal and begin...Today!

3. No exit strategies Ok, you closed on the deal, now what? It's a good idea to know this before you purchase the home.

4. Purchase bad deals out of desperation You only need one good deal. Not, a lot of bad ones!

5. Not planning for contingencies There are a lot of things that can go wrong. Learn how to improvise your way to a profit.

6. Not hiring professional contractors Only deal with licensed professionals. They cost more, but in the end you get what you pay for.

7. Rehabbing for self-values Remember, you are not rehabbing to move into the home. Do not spend a lot of money on useless cosmetic materials that will not increase the value of the home.

8. Not building a strong support team You will only be as good as the team you put together. You need to have the best Accountant, Broker, Mentor, Financial advisor that money can by. Why? The more money you make the more they make!

9. Starting up with a partner A partner should complement you to make up for your negatives. Give yourself some time to figure out what those deficiencies are.

10. Not factoring in holding costs Please do not forget. You are responsible for paying for the note on all of these properties. So, if you do not sell them right away, you should have enough reserve to keep them for the months down the road. So factor this cost into your purchase price. After all holding costs come out of your profit!

Any one of these practices can serve as a death-blow to your career in Real estate investment before you truly get started. Unfortunately, many break one or more of these on a consistent basis and quickly find themselves out of the business and out of a great deal of money. How do you keep from committing these mistakes? As an age old sage used to say- "Just stop!" But this may not be so easy to do in the heat of deal making and the hustle and bustle involved in this business. This is important to grasp and hold onto for the long haul. The fact is you will make mistakes in this profession. You will try to cut corners, get desperate and make a wrong move deal wise. I believe that through the mistakes, come great lessons and even better "best practices" that will benefit you in the long run. So first and foremost, give yourself a break when you do make the mistakes. Constantly re-evaluate what it is that you are trying to accomplish. Just as important is that you immediately find and develop a relationship with a mentor that you trust and that understands what it is that you are trying to achieve as an individual and real estate investment professional.

*This business is fast and ever-changing. Day to day the market and the people that you deal with will come up with obstacles or challenges to the way you want to make the deal work. Even the billionaire investors face this challenge. Know this and integrate this into how you make your plans and strategies and you will go far in this business. Common sense, desire and a passion for doing what you love is what it will take to make this the best decision that you will ever make on the road to fulfillment and success in real estate investment.



	Ten Common Mistakes of the New Investor Low interest rates, buyer incentive programs, real estate investment classes and courses available online and on TV are among the reasons. Not since the building boom of the 1950s has there been as much excitement and activity in the real estate market. People all over the country are lining up to cash in on this latest boom. This is an exciting time to own real estate-the price is right and the opportunity to really diversify and use real estate earnings abounds. While many are flocking to this new area of real estate investment, as evidenced by all of the late night TV ads- few are making the money and opportunities really pay off in the long term. Why? Simple mistakes and poor planning of investment strategy. As an investor and consultant with over ten years experience in real estate investment, it has been amazing to experience the trends and see and learn from the players that have true staying power in the field. Some are coming from the Infomercial set, but many are coming from a tried and true grassroots effort to make real estate investment work for more than just the short-term get rich quick perspective. My own experience has been full of both success, and the struggle of losing money in deals. From these experiences, I have learned that there are too good to be true moments, as well as the sweat busters that this business is made. On this road, I have met many investors that could only be described as half-hearted and not in the business for the long haul- not because they do not want to make money or be a success-but because the reality of this business is that it takes more than a prescribed by the book approach to longevity and true success. The fact is that it takes more than just the tapes, or a few classes to make this beast work. Many come into real estate investment armed with good intentions, but without a true understanding of what it takes to make the deals work for them. I liken it to the training it takes to become a doctor or dentist- Would you go to one that learned their trade off of a TV infomercial ? or would you rather have your root canal done by a Harvard professional with years of training and experience under his or her belt? Now, don't get me wrong- you certainly do not need a Harvard degree, or an extensive amount of training to go into real estate investment. That is the beauty of the business. But, you do need to understand the complexities of what you undertake when you have made the decision to go into the investment business, or you will get burned. This business has taught me a great deal about the way to go about attaining true success and fulfillment using a very simple and realistic approach to investment. As I mentor and train new investors, I have listened and watched as they have triumphed, gone broke, or missed opportunities to grow and earn more money through their investment deals. What resounds for me most as I continue this work is that sometimes the simplest truths are hidden the deepest from us. I have come up with ten common mistakes that new investors-and yes even us old timers- can make in trying to make real estate investment work. 1. Paralysis of analysis You know? The person who attends every seminar, yet hasn't done a deal yet! 2. Over analysis of potential deals Stop looking for the perfect deal. Every deal is a risk. Learn how to make your risk minimal and begin...Today! 3. No exit strategies Ok, you closed on the deal, now what? It's a good idea to know this before you purchase the home. 4. Purchase bad deals out of desperation You only need one good deal. Not, a lot of bad ones! 5. Not planning for contingencies There are a lot of things that can go wrong. Learn how to improvise your way to a profit. 6. Not hiring professional contractors Only deal with licensed professionals. They cost more, but in the end you get what you pay for. 7. Rehabbing for self-values Remember, you are not rehabbing to move into the home. Do not spend a lot of money on useless cosmetic materials that will not increase the value of the home. 8. Not building a strong support team You will only be as good as the team you put together. You need to have the best Accountant, Broker, Mentor, Financial advisor that money can by. Why? The more money you make the more they make! 9. Starting up with a partner A partner should complement you to make up for your negatives. Give yourself some time to figure out what those deficiencies are. 10. Not factoring in holding costs Please do not forget. You are responsible for paying for the note on all of these properties. So, if you do not sell them right away, you should have enough reserve to keep them for the months down the road. So factor this cost into your purchase price. After all holding costs come out of your profit! Any one of these practices can serve as a death-blow to your career in Real estate investment before you truly get started. Unfortunately, many break one or more of these on a consistent basis and quickly find themselves out of the business and out of a great deal of money. How do you keep from committing these mistakes? As an age old sage used to say- "Just stop!" But this may not be so easy to do in the heat of deal making and the hustle and bustle involved in this business. This is important to grasp and hold onto for the long haul. The fact is you will make mistakes in this profession. You will try to cut corners, get desperate and make a wrong move deal wise. I believe that through the mistakes, come great lessons and even better "best practices" that will benefit you in the long run. So first and foremost, give yourself a break when you do make the mistakes. Constantly re-evaluate what it is that you are trying to accomplish. Just as important is that you immediately find and develop a relationship with a mentor that you trust and that understands what it is that you are trying to achieve as an individual and real estate investment professional. *This business is fast and ever-changing. Day to day the market and the people that you deal with will come up with obstacles or challenges to the way you want to make the deal work. Even the billionaire investors face this challenge. Know this and integrate this into how you make your plans and strategies and you will go far in this business. Common sense, desire and a passion for doing what you love is what it will take to make this the best decision that you will ever make on the road to fulfillment and success in real estate investment. 2007 Taylor1 Incorporated All Rights Reserved