All real estate investors have to start somewhere and that will usually come with a few mistakes. Some may be small and some may be large and very costly. Growing pains are a part of investing in real estate and really just a fact of life no matter where you go or what you do. It is all a part of the journey however, there are some mistakes that can be upsetting for new real estate investors and could possibly end their career before it even starts. Almost every mistake can be turned around and salvaged if an investor is willing to put in the necessary work.
One of the biggest mistakes new real estate investors can make is mishandling their assets, specifically money. This can happen from miscalculating or not calculating the cash flow for a property which can then lead to negative cash flow if a property’s projected income is overestimated.
This can also mean that one did not account for all of the numerous monthly costs of their investment, it’s not just a mortgage.
Real estate investment is not a get rich quick opportunity and anything telling you different is just trying to sell you something. In this business nothing comes instantly and definitely doesn’t come without effort, even if you are a passive investor.
While we are talking about trying to get rich fast, a lot of new investors make the mistake of taking on more than they can handle. They move too quickly, buying more property before they should or trying to expand into a new market before they are prepared. Taking on more than you can handle will stress you out and ultimately compromise your capability to make good decisions.
This mistake is a little less lethal than the rest, mostly because you can still make it work. Many real estate investors make the mistake of purchasing cheap properties when starting out. It makes sense but you won’t see the returns that you could be seeing.