Wednesday, September 16, 2015 / by Ken Couture
Continuing our study of common but costly mistakes new investors make in real estate. Here are the last five of the top ten mistakes.
6. Poorly calculated estimates
A good rule of thumb is calculate your costs, then double it. If you can still make a profit or you could be able to rent it, then it should be a good deal.
7. Paying too much
The number one reason for not making money investing is that you paid too much. Use your financial analysis well, or use a professional to help with the financial aspects before you buy. Ensure that your profit margin is large enough for unforeseen issues.
8. Trying to do it all alone
Your success will depend on the professional people you surround yourself with: at least one real estate agent, an appraiser, an inspector, a closing lawyer and a lender--both for your investments and to refer prospective buyers for financing.
If you plan to remodel or rehab and flip homes, you will also need a circle of professionals in that venue. You can work this one of two ways: have relationships with specialized professional vendors or find one amazing general contractor that handles your projects with their sub-contractors.
9. Skipping due diligence
Real estate deals can move fast! Don’t get caught up in the deal without doing your research. You can lose a large amount of money in a very short time by not having all the proper information. Know the market conditions, the property conditions and calculate your price point and your decision to actually buy based on facts, not whims.
10. Transactions vs. running a business
If you are only working one deal at a time, you are just working transactions, not running or building a business. You should have a steady flow of prospective deals; this allows you to be picky and find the best deals available, and helps you to build a good foundation for a business.
I hope that these are mistakes that you take to heart and do not make yourself. If you do get caught up and side-step your investing path, maybe after reading these you will be able to get back on track!
When you are ready to invest, buy or sell, visit my website or call me direct--Ken Couture, 702-610-6247.