Common Mistakes by Novice Investors

As our real estate market shifts to a buyer’s market, and first time homebuyer loans become less readily available, rental properties become more appealing.  Like any other endeavor in life, it must be done correctly.  This article is designed to help investors avoid the most costly mistakes.

First mistake- not having a plan.  I’ve seen many gung ho investors decide to jump into buying investment properties with no plan for what to do with it once you own it.  It may be a really great deal, but if you don’t have a plan for it, it is not the right deal for you.  Don’t work backwards, first devise your strategy, then find the deals that fit your plan. 

Second mistake-lack of knowlege.  Once you have a plan, you must either learn your market, or hire a professional to help.  The best investors know their market area so well that they can jump on the best deals on a moment’s notice.  A true investor knows all their money is made up front, buying at the right price is the key.  If you buy a property at tremendous discount, it will fit into any plan.

Third mistake-not having your finances lined up.  Unless you are fortunate enough to have a wealth of cash, you need to have some resources available to fall back on.  These can be a line of credit or a private lender.  But it must be cash that is available immediately.  You never want to lose a really profitable deal because you couldn’t get the cash today.