Local Records Office in Bellflower, California has been in the real estate business for a few decades already. By seeing the different ways the market has fluctuated over the years the professionals at the Local Records Office have realized that many of these changes have a domino effect due to new or bad real estate investors and agents. Even though real estate investing can be a great way to make money, there are a lot of mistakes that can happen. There are a lot of pitfalls you need to avoid to make sure that you actually make money, so here are 10 mistakes you should avoid if you’re new to the market.
1. Not Knowing How Much You Can Afford
One of the biggest mistakes real estate investors do is trying to buy beyond their means. You should be aware of your budget and certainly not exceed it, even if a property definitely seems to be perfect. You will be setting yourself up for just a fall. Local Records Office points out how a large portion of investors want to buy fixer-uppers, even though this is a great way of thinking, not every fixer-upper can be fixed and still make money from it. Some fixer-uppers are money-sucking properties that are in the real estate market for that exact reason. Having a professional contractor take a look at the property for an estimate is a great way to start. After that, you can calculate how much you can afford to spend on the property and how much it will bring in.
“Real estate investors only think about flipping a property and making money but it’s not always that simple. Yes, you can get lucky but sometimes investors bite more than they can chew. I’ve seen this many, many times” says Kevin Dales a real estate investor in Los Angeles, California.
2. Not Educating Yourself
Before you commit to buying any property, you need to know everything you can possibly know about it. This not only allows you to better estimate how much money you will need to invest after purchase but can also allow you to negotiate a lower price. Educating yourself on what type of material and labor the property is going to need is always the best way to go in, going in without some sort of idea is not a good idea.
3. Going Away from Your Comfort Zone
If you have managed to make a modest amount of money investing, be sure to stick to what you know until you have the budget to try something new. Even then, you don’t want to invest without the proper knowledge. Going out of your comfort zone is a great way to make big bucks but don’t let this be an excuse to neglect to educate yourself.
4. Not Charging Enough
If you’re renting properties, you need to ensure you are charging enough to make money. This involves researching the area and also the average prices for a property with the type you are letting out and about, to ensure you stay aggressive yet profitable. As new real estate investors, we want to make the most money possible but we can feel like we can’t compete with the big boys so the first instinct someone might have is to lower prices.
5. The One That Got Away
All investors have the one that got away, but sometimes that is not a bad thing. Just because something seemed perfect doesn’t mean you have to buy it, especially if the numbers don’t increase as you go along.
“As real estate investors we will always have the property that got away, this might haunt us for a while but it happens to the best of us. The best thing to do is to let it go and move on. There will be others you just have to keep looking,” says Larry Jean an investor from Front End Investments in Norwalk, California.
6. Be Satisfied
If your property wants renovation work, you should never be capable where you paying 100% with the cost before the work will be completed. Be sure that you are completely happy before you hand over all of that other cash. Be satisfied with what you find, investors get stuck trying to invest in anything and everything they can and end up taking a loss afterward.
“When there’s as much money as there is to make in real estate people don’t ever seem to be satisfied. Investors need to learn how to invest in properties with the most potential and pull back. Holding on to too many properties for too long will cause problems” says Tim Carson a private property investor in Los Angels, California.
7. Relationships With Tenants
Any kind of relationship with a tenant, friendship or elsewhere, is dangerous. Your relationship should be strictly business so that you will never be a placement where your emotions are conflicting with doing what you ought to do to sustain the company. Especially when it comes to evictions.
8. Not Being Cautious
Most properties don’t have a problem that is easily viewable, which doesn’t mean there are no problems. Be sure to diligently check your buildings to be able to catch anything that would become an issue as soon as possible.
9. Not Looking for Grants or Loans
You don’t necessarily need to go into real estate investment opportunities alone. A lot of states provide special loans and grants programs that can cover many of the costs for you. Be sure that you’re aware of what you possibly can and can’t claim for. The Local Records Office strongly suggests real estate investors use grants and loans for any real estate business.
“Loans and grants are created by the government to help people with financial help when it comes to investing in properties. As long as the grants and loans are used for the purposed, they were intended to be used for most of the time they won’t have to be paid back” says the Local Records Office in Bellflower, California.
10. Ignoring Cash Flow
You should always be completely aware of what is coming into your account from all of your properties. Just assuming everything is okay is the best way to leave yourself open to disaster. Find out what isn’t doing in addition to what it should and solve the matter.
Company Name: Local Records Office
Contact Person: Roberto Romero
Email: Send Email
Phone: 1 (800) 790-0721
Address:2202 S. Figueroa St. #406
City: Los Angeles
State: CA 90007
Country: United States