Ten common mistakes of beginning real estate investors.

 The following are the most common errors made by beginning real estate investors. If you read all of the real estate articles on this web site www.towardswealth.com you will have the equivalent of a masters degree in real estate investing. Practice what you read here, and you will be richer.

 1. Over paying because they did not take the time to crunch the numbers.

The property must cash flow. You have to be able to rent the place with enough to cover all your monthly cash payouts and still have a little left over. If you can do that you can hold on until things get better. If the place cash flows, time will make the deal profitable.

2. Underestimating the cost of repairs and the time it takes to do them.

Keep in mind everything always takes twice as long as you thought and cost twice as much. You must take that into consideration when you buy the place. It is your total cost the determines if you can make a profit or not.

3. Not checking the tenets credit and rental history.

This should be number #1 because bad tenets make renting a nightmare and good tenets make the place a cash cow. Charge prospective renters an application fee and run the credit, criminal, and rent history back ground check.

4. Renting to relatives.

In one word Don't. It is seldom if ever a pretty picture.

5 Being nice to tenets who do not pay their rent.

If the tenet does not pay the rent start the eviction letter process right away. I tell my renters that I am the nicest guy they will ever meet until they do not pay the rent, then I am one mean landlord, very mean. I will hold up my end of the bargain and take care of their apartment in a timely manner. I also evict non payers with the same timely manner.

6. Thinking they can do all the repairs themselves.

Hire things done unless you can do it right now yourself. The faster repairs are done the better and cheaper it is. Your tenets deserve a nice place to live that is well maintained and you deserve and must demand to get paid on time. They go hand in hand.

7. Not thinking of selling while they are buying.

You make your money when you buy and you realize your profit when you sell. The time to think about selling is while you are looking at buying the place. What will your buyer want to see? Will you be able to deliver that when you are ready to sell?

8. Over thinking the property Deal.

If the property works for you. If you feel you can make it pay. If the numbers work and you can do the deal. STOP! Thinking and buy it.

9. Not maintaining the property.

I get my best bargains because landlords neglect their properties. That drives away the better tenets and keeps rents low. I simply buy at the current economic value less repairs. I then do the delayed maintenance and raise the rents. I can then sell at a profit. If you take care of your property you do not give the tenet a reason to not pay their rent.

10. Not having a what if plan.

I have purchased properties under all kinds of circumstances but I always have a what if plan. If this deal takes six months to get the cash flowing, how will I make the payments? If my repair cost estimates are to low, what will I do to compensate? You get the idea. I think of the negatives things that might go wrong and I then propose a solution. Having a”what if” plan gets rid of the panic.