5  Rookie  Mistakes  of  Real  Estate  Investing  By  Giro  Katsimbrakis  November  12,  2013    A   lot   of   people   will   tell  you   that   real   estate  investing   is   easy,   and  they’re   half   right.   If   you  do  your  due  diligence  and  create   a   good   strategy,  you  can  get  a  good  return  on   your   investment  without   too   much   blood,  sweat,   and   tears.  However,   there   are   all  kinds   of   mistakes   real  estate  investors  can  make,  especially  beginners.    Here’s  a  list  of  5  mistakes  a   lot   of   novices   make  when  they’re  first  starting  out.  Don’t   let  any  of  these  happen  to  you!    

1. Idle   speculation.  A   lot  of  beginners   listen   to  voices  out   there   in   the  media  and   buy   a   property   at   or   above   market   value   hoping   it   will   appreciate  because  somebody  said  it  might.  This  is  as  unreliable  as  playing  blackjack  or  betting   on   horses.   Don’t   do   it.   Buy   distressed   properties   (70%   or   less   of  market  value)  guaranteed  to  create  cash  flow.  

2. Getting   emotional.  Many   newbies   hardly   spend   any   time   at   all   locating   a  deal  that’s  right  for  them.  As  soon  as  they  find  a  prospect,  they  fall  in  love  and  bend  over  backwards  to  get  the  property.  Resist  this  temptation.  Get  as  many  prospects  that  fit  your  criteria,   filter  out  the  doozies,  and  pick  only  the  best  deals.  

3. Risking  too  much  (of  your  own)  money.  Newsflash:  Real  estate  is  an  OPM  industry.  That  stands  for  “Other  People’s  Money.”  Always  strive  to  minimize  how  much  of  your  dough  is  on  the  line,  and  make  sure  you’ve  got  reserves  in  case  the  deal  hits  the  fan,  so  to  speak.  

4. Being   unprepared.  When   things   go   awry,  would   you   rather   have   one   exit  strategy  or  many  exit  strategies?  If  you  can’t  flip  a  property,  your  world  can  turn   upside   down   over   night–you   can   get   behind   in   payments,   lose   the  property,  and  even  your  credit.  Don’t  let  this  happen.  Buy  below  the  market  so  you  always  have  numerous  options–selling  retail,  selling  wholesale,  lease  option,  seller  finance,  refinance,  or  rent  and  hold.  

5. Buying  in  war  zones.  As  I’ve  said,  below  market  value  is  the  way  to  go,  but  some  deep  discounts  are  too  good  to  be  true.  Sure  you  found  a  $70K  property  for  $25K,  but  is  it  surrounded  by  glut  and  foreclosures?  Will  it  get  vandalized  while  you’re  trying  to  make  repairs?  Is  there  any  actual  interest  from  renters  or  buyers?  Make  sure  the  demand  is  strong  before  you  commit.  

 One  more  bonus  tip  for  you:  Don’t  attempt  to  DIY.  Some  people  can’t  stand  the  idea  of   someone   else   giving   them   advice   or   sharing   their   responsibilities,   but   if   you’re  just  starting  out,  nothing  will  be  more  crucial  to  you  and  your  success  than  a  team  of  experts  who   know   the   ins   and   outs   of   the   business   and   are   there   to   support   and  guide  you  through  your  first  few  steps.  With  a  qualified  and  proven  team  like  Giro  Katsimbrakis’  DPW  Properties  or  NMIG  at  your  side,  you’ll  be  making  money  in  no  time.