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This is my first blog and am really excited! So bear with me… Here are the most common mistakes new and maybe not so “new” investors make:

1. Lack of planning.

Most beginner real estate investors don’t have a set of investing criteria. Some of them could be the type of the property they will invest in, the area they will invest in, the price range of the house, the cash-on-cash rate of return. All of the above except for the cash-on-cash rate of return can be determined by a market research of your area. First set your criteria and then find a house that fits these criteria. Not the other way around.

2. Not having a Power Team in place.

Many investors don’t realize the importance of building a team of professional experts. At the very least, you’ll need one real-estate agent, an appraiser, a home inspector, a real estate attorney, a lender, an accountant and a contractor or handyman. Trying to do everything by yourself will only slow you down and probably will cost you a lot of money in “mistakes”. 

3. Having the wrong people in their Power Team.

Don’t let just anybody in your team. Ask for references and interview them. Ask them if they own investment properties themselves. A real estate agent who has invested in real estate can see the investor’s point of view which is different than a regular buyer’s. Do you think that an accountant/CPA may know all the tax deductions for a real estate investor if he is one himself?

4. Not having an experienced mentor to assist you.

A good mentor can save you a great deal of time, money and help you avoid costly mistakes. At the same time keep educating yourself. Attend workshops in your local Real Estate Investing Club (Hint: you may find your mentor(s) there).

5. Not treating investing as a business.

Real Estate Investing is a BUSINESS! Let me say that one more time, Real Estate Investing is a BUSINESS. That means you should have a business and a marketing plan at the very least. Your business plan doesn’t have to be elaborate, but have it written so that you are clear on your goals and how to get them. Go back and review it every 6 months. Bottom line is treat Real Estate Investing like a business and it will pay you like a business. Treat it like a hobby and it will COST you like a hobby. 

6. Not having and following a step-by-step system.

Many investors “go with the flow”. Having a structure and a system will assist you to avoid bad deals, and speed up your transactions. A system is what distinguishes the self-employed from the Business Owner. A mentor, education, a business and a marketing plan with clear investing criteria and taking ACTION will assist you to create a successful System.

7. Underestimating repair and holding costs.

New rehabbers and fix ’n’ flippers after they have read a few books and watched a couple of TV shows go out to become investors. In my opinion, rehabbing is one of the most “dangerous” real estate investing strategies especially in this economy. If you are not a seasoned investor you have no business getting involved with fix ’n’ flip or rehabbing. It’s very easy for someone who is just starting out to underestimate repair and holding costs. In this case, best case scenario all your profits are gone. Worst case scenario, you go to foreclosure. Real Estate Investing is not only rehabbing and buy and hold. Educate yourself on other investing strategies. That way, you’ll have more options and exit strategies.

Now, obviously there are other things that someone could add to this list, but if you could avoid some of the the above you could skyrocket your real estate investing career.