Why do most real estate investors fail? What are so many doing wrong? From working and specializing with real estate investors, I see the same mistakes being made over and over again!
Why Do Real Estate Investors Fail?
Most of these mistakes can easily be avoided with proper training and guidance from a professional – like your investment specialized real estate agent!
1 – Not Focused And Specialized
The biggest mistake I see among real estate investors is NOT being specialized in a specific location or niche. If you truly want to succeed in real estate, becoming an expert is of the utmost importance!
You need to figure out which niche best fits your goals and ideal lifestyle (something I can personally help you with!). Once you know which type of property is best for you, becoming a geographic specialist is next.
In order to minimize mistakes and losing money, you need to know exactly what your ideal property sells and rents for in your ideal neighborhoods as well as the average cost to renovate them. This will help you make very quick decisions on whether you should even see the property in person and spend more time on it.
Once you get to this level of specialization, the chances of you making rookie money losing mistakes will lower drastically!
2 – Get Into Bad Deals
Another common mistake is getting into bad deals. Usually from not specializing as mentioned above, but also from listening to those who have very little knowledge in real estate investing. Usually a realtor that doesn’t specialize or invest themselves, or from a friend.
I can’t count how many times real estate investors tell me, “my friend told me about this great deal in Vancouver, Canada” even though they live in Toronto and know NOTHING about the market or property.
Listening to those who aren’t real estate experts themselves is often a recipe for disaster!
3 – Don’t Know How To Analyze Deals
Most real estate investors have no idea how to properly analyze deals and decide if it’s a property worth buying. For example, when walking through a property you should know within minutes how many renovations will it need? How much will it cost? What colour schemes are your paint and flooring going to be? What is the area like? What kind of tenant profile will this attract? How can I market it effectively to my ideal tenant?
Professional real estate investors know the answers to these questions very quickly when walking through potential properties.
4 – Don’t Know How To Calculate For Cash Flow
Calculating for cash flow is a no brainer. If you don’t know how to PROPERLY run all of the numbers and expenses, you will most certainly lose at the game of real estate investing!
Calculating for cash flow is a whole other blog (or full book) on it’s own, but watch me personally break down the numbers on potential properties you can watch the video below. This will show you exactly how to run the numbers on a property.
5 – NOT Working With The Pros
As I mentioned earlier, working with professionals is vita to the success of your business.
When investing in real estate, you NEED to be working with a realtor that specializes with investors and one that also invests themselves! Preferably, you want to work with a realtor that has over ten properties ideally.
I know, that sounds like a lot! But you want to succeed don’t you? Why not learn from someone who’s CRUSHING it in real estate? Remember, your realtor is your coach – not just your realtor!
They will be teaching you about the area, where to invest, why to invest here, what you can do to the property to raise the value etc.
6 – Let Contractors Walk All Over Them
The most overlooked and MOST certain way that you’ll lose money in real estate is from contractors! A lot of contractors are professionals at making you spend more on projects than needed! whether it’s from up-selling you, making repairs sound WAY worse than they actually are or by taking way too long on projects that cost you money through holding costs (mortgage payments, property taxes, insurance) contractors will steal money right from your pockets!
Finding a great team of contractors is absolutely vita to your business. This can take a LONG time to find reliable and honest tradesman so working with an investment specialized realtor is even more important because you can leverage their team of professionals!
Remember how I said to work with realtors with over 10 properties? This is because real estate investors and realtors at this level MUST have a good and proven team in place. Another reason why you should be seeking out these realtors!
7 – They Manager Their Own Properties
I’m all for managing your own properties when you’re starting out and only own one or two properties, but if you want to scale your business to multiple properties you need to find professional property management to take over the day-to-day tasks.
Your SOLE ob as real estate investors is to find money (partners) to buy more properties. NOT to be changing toilets, dealing with missed rent payments or finding new tenants.
Especially if you’re still working a full time job.
These are seven of the most common reasons why real estate investors fail! I hope you take the tips and strategies suggested and build out your business properly!
Investing in real estate can provide A LOT of freedom in your life, but only if done correctly!
PS: For being awesome and checking out my blog, I want to give you some FREE stuff! (You like free stuff, right?) Get my book and courses below for free and take your business and life to the next level!
– Get FREE Access To My 12 Video Real Estate Investing Course Here – http://realestateinvestingapprenticeship.com/index.php/12-videos/
Also, don’t forget to check out my Real Estate Investing Apprenticeship Program™ by clicking HERE. If you want to take your life to the next level and get one-on-one guidance from me for the next 5 years (yes, 5 WHOLE years), this program is for you!