…and how to avoid them!
1. HIRING THE WRONG VENDORS
Hiring unqualified contractors can cost both time and money…important to generating wealth from real estate. Many contractors don’t understand investment real estate. Work with those that do.
2. SEARCHING FOR DEALS BY YOURSELF
Novice investors burn up hours of time and gallons of gasoline looking for deals. The best deals find their way to wholesalers and real estate agents that specialize in investment properties. Build a team of agents that know you and what you’re looking for.
3. HIRING PROPERTY MANAGERS
The cost of outside property management can improve cash flow and lets you do what you do best.
4. OVEREMPHASIZING CASH FLOW
Make money by acquiring equity, asset appreciation and cash flow. Don’t miss out on large equity and appreciation gains by looking only at cash flow. The secret to real estate wealth is acquiring appreciating assets.
5. MINIMAL CASH RESERVES
Keeping less than a 3 month cash reserve for each property owned creates a problem for investors who can’t weather a vacancy or a delay in section 8 payments. Keep a little more cash on hand for emergencies.
6. WAITING TO TRANSFER UTILITIES
This is a simple mistake that gets investors every time! They wait until closing to transfer the utilities into their name. They find extra reconnection fees and days of delays when they need contractors in their house!
7. RUSHING TOO FAST
Don’t fall for the quick buck schemes. Wealth comes from a solid plan and property appreciation over time. Don’t count on finding a “steal”, taking advantage of vulnerable sellers at closing or any of the other schemes you read about.
8. ACQUISITION WITHOUT DILIGENCE
Make money when you buy the right property. Buying the wrong house can cost an investor dearly. Take the time to do your homework on each property. Make sure you’re buying the right type of property in the right area for the right price. A little extra diligence up front can save you thousands of dollars and help you reach your goals faster.
9. SPENDING TOO MUCH CASH UP FRONT
The key to building wealth is acquiring multiple properties. The less cash you put up front, the more properties you can purchase. We have access to special financing to minimize their cash out of pocket and allow them to buy more houses and increase their profits.
Too many good investors drag their feet too long and allow their fears to keep them from making money. In real estate, there is only one thing for sure. If you don’t buy a property, you won’t make any money. Take the first step.
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