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Here Is Why Amateur Real Estate Investors Suck

Here is why amateur real estate investors suck

A real estate investor’s first year in the market can be a hit or a miss. For many, this time includes harsh mistakes and more learning than they expected. Unfortunately, some of their mistakes will influence their clients, new tenants, and landlords, too. Here are the top few mistakes that real estate investors sometimes make when first breaking into the game.

Amateur Real Estate Investors: Taking on Too Much

Sometimes, in the excitement of the new real estate prospect, investors and house flippers take too much into their own hands. The idea of asking for help seems to be unthinkable. The opportunity to DIY everything and to save money is preferable. This usually leads to further maintenance problems in the long run, and often professionals need to come in later. This costs the investor both time and money that the investor could have saved by being open to help from the very beginning. So, this mistake is one of the big ones. Some of the most common areas where amateur real estate investors neglect to relinquish power are:

  • Painting and wall repairs
  • Leveling sloped foundations 
  • Drywall removal
  • General construction 
  • Glass and window fitting

Not Running the Numbers

Amateur real estate investors sometimes mistake cheap properties to be wise investments. To avoid this, you need to run the numbers, prior to the purchase. This will let you know if you are making a sound investment or a risky one. Many real estate investors neglect to look over the numbers during their first year. The need to break into the market as soon as possible far outweighs the risk of being proven wrong on a deal. To successfully run numbers on a potential investment, there are a few routes that you can take:

  • Take a course: There are many online and in-person courses where experts will teach you the real estate math system.
  • Teach yourself: Sit and think about all the numbers involved and how they might come to affect one another.
  • Consult a professional: Approach a financial advisor to run your numbers for you, to ensure that it is done properly.

Spending Before Earning

Too often, amateur real estate investors make the mistake of spending more money than they earn. They make use of loans and credit cards in the early stages of the investment. They assume that they will pay this off with a lump sum when the property sells. While this can work on occasion, there are always risks of market crashes and no property sales. When it comes to real estate, spending money that you do not have is always a bad idea.

There are many ways that amateur real estate investors can make mistakes during the first year of operation. Thus, if you are an amateur real estate investor, take advice from those who have gone before you and apply it to your game. Happy investing!

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