Every real estate investor was at one time a newbie. We all had to start somewhere, and most likely it started with dreams of making it big, of quitting our jobs and retiring to the good life. The thing with many newbies is they are full of enthusiasm and excitement, which is good, but it can also be blinding. They can’t wait to get started, can’t wait to be successful and quit their jobs and move to the beach. This eagerness gives many a newbie a blinder of sorts. It turns off that part of the brain that tells them to stop and think — and many let down their guard. Because of this, they can get into trouble before they even really get started.
1. Jumping in Too Fast
Not letting down your guard is perhaps the first thing any aspiring real estate investor should learn to do. But what exactly should they be on guard for? What should you be wary of? Here are some thoughts. Don’t be so quick to pull the trigger. Relax. There are plenty of deals out there. Take your time. Learn about your market. Learn what constitutes a good deal. Yes, you are excited about your new real estate venture and that you really want to get started. But moving too fast might get you in a heap of trouble. Bad deals can be really hard to fix. So learn to tread water before going off the high dive.
2. Taking on Too Big of a Project
Here is an example, don’t buy a 30-unit apartment building as your first investment property. These types of projects are simply too complicated for most first time investors. Instead, pick up a single apartment or two, which require minimal amounts of repairs. You’ll get your feet wet and learn the business as you go along. Plus, once you get in you may find that there is danger of No.3
3. Possibly Hating Real Estate
Being a real estate investor is not a day at the beach. It can help you get to the beach more, but being an investor means running a business. Every day presents new problems and opportunities that have to be tackled, and win or lose, it is all up to you. Some folks thrive in this environment; others do not. The thing is, you can’t really tell until you do it. So start slow to make sure real estate is the thing for you.
4. Overextending Your Resources
Don’t spend all of your money. Keep some for reserves. You will need it. Also, manage your time well. Expand slowly but surely, so you can learn the business and avoid burning yourself out.
5. Trying to Do Too Many Things
Some newbies want to do it all. They want to buy and hold, rehabilitate, retail, wholesale, etc. This greedy approach often causes a loss of focus, which in turn can often lead to failure. Again, start slow and focus your efforts. You are much more likely to be successful that way, and you can (and should) branch out later on after you gain some experience.
6. Trying to Make the Numbers Fit
Be very worried of trying to make the numbers fit. The numbers generally do not lie, and if they are telling you there is no deal, there is likely no deal. Don’t think that you have overlooked something. Don’t think that repairs and expenses will be cheaper. They will not. The formulas are tried and true. Believe them!
7. Being Fraudulently Sold a Dream
There are lots of so called “gurus” out there. Some are good, some are bad. Some you should listen to, some you should be wary of. Dismiss of anyone selling you the dream of sitting on a beach. As I said earlier, real estate investing is about running a business, and at least at first you need to be very involved in it. Don’t fall for the hyped-up dream.
8. Being Offered a “Home Run”
So-called “home runs” in this business are few and far between. You should be very wary of anyone promising a home run deal. It may very well be a home run, but ask yourself why is it being pitched to a beginner like you? Do your homework and run your numbers before you buy anything. Hopefully then you will hit a home run or two in your career.
9. Being Told You Have to “Buy Now!”
You never have to “buy now!” Be it a property or real estate training material. Sleep on it at least. You will find your mind really clears and will make much better decisions after 24 hours and a good rest.
10. Being Told You Have to Pay a Lot for a Real Estate training
You might know of folks who have paid an arm and a leg for real estate training. And while there may have been some good materials in that product some charges are just plain crazy. Sure, sometimes it is wise to spend a little on training materials, but many, many things can now be found for free or at least very cheaply.
11. Working With Many Real Estate Agents
Most real estate agents are simply not set up to work with investors. They really do not understand what investors do or how they think about real estate. What many claim is a deal simply is not. Working with a real estate agent can be a good thing for some, but take your time and find one who understands real estate investors and will truly help educate you and help you find what you are looking for.
Being successful at real estate is a process of learning and doing. How long that process takes is up to you, but it generally will not and cannot happen overnight. Understanding that is often half the battle — and being persistent is the other half.
So you starters out there, real estate has been getting hot in kenya, but please keep your cool. Take your time, learn and follow the advice in this post.