What were some mistake you've made in real estate investing?

Question

I'm going to start off by saying that I am extremely new to social networking sites, I have none but this one honestly and I'm 20 years old. I want to make real estate my profession. I am very knowledgeable of what to do ( I think ) but I'm more interest on what I must avoid. My main worry is; is school a essential? I am currently attending a university as a sophomore and I find myself not at all interested in school but fascinated by economics. I've always been called a "hustler", always made ends meet, always been told I'm manipulative, and that I constantly think of new ideas. All I talk about is real estate, how I would make a profit, how I would get people interested in my properties, I even have a business plan that I've been working on for a year (that I'm constantly changing), but I want to learn from the wise; What should I avoid doing? What are some of your biggest real estate regrets?

Abdul R. · Answer

Not sure if it is related. But biggest mistake is not having started when I was in my 20s. But better late than never....

Shawn Thom · Answer

Bad contractors and relying on cheap labor.  I learned the most expensive thing you can have sometimes is "cheap labor".

Account Closed · Answer

Mine was buying with (and in) the herd at a 20% below market value property in 2006... nevermind that that was during the peak of the market hype.  what was my lesson? several:

1. don't trust the herd;

2. know what you're doing (know the numbers and your market);

3. "20% below market" isn't a deal when you don't have context... 20% below current price at the peak is not the same as 20% below market in a buyer's market... knowing what cycle you're in provides great context!

4. did i mention not knowing the numbers?

5. i was SO beat down (along w/some very poor herd mentality investments in other things) that i am now committing @Will Barnard 's other mistake of spending 4yrs - currently in 2nd year - of wanting/planning to get back on the horse before really doing it (again).

6. working backwards from goal to action steps and committing each day or regular period time per week towards attainment of that goal - while consistently networking... working on that now... :)

7. and lastly... knowing the numbers, the market, the area, and the numbers - practical and on paper.

Aaron Mazzrillo · Answer

Listen to the podcast I just did. I give out some great tips on how to avoid some common mistakes. The number one way is to buy a saleable and in demand product. The second is to not pay too much for it.

Ellis San Jose · Answer

I made a doosy of a mistake by not trusting myself more and instead followed who I thought were wiser and more knowledgeable investors because they were much older and more experienced. Consequently gave away too much control and am still feeling the sting of that one.

Also, early on I didn't interact much with other investors and operated on my own and kept a low profile.  Missed out on so many opportunities to learn.

Kyle Hipp · Answer

I would say that the biggest mistakes that I have made come when I think that I will be able to change the results that my research and data provide. I think this has been a common theme from other folks stories as well. Don't think the fantastic fireplace will make up for the lack of a 3rd bedroom compared to your comps. Don't think the prices a block over will justify a higher price when your property is on a busy street and the comps are not. Just don't fight the data. These real numbers are there for a reason.

Just some unsolicited advice from what you wrote as well. In this business you reputation is paramount.  Communication is key at all times. You describe yourself and say other tell you that you are manipulative.  I do not see this as a good thing by any means. This is a service industry, the more you give of yourself and the more you serve your clients the more you get back. If those you want to serve have a feeling that you are manipulative or just get a weird feel from you then they will not want to do business with you. You must be ethical to have long term success.  There are countless stories of people accepting a lower offer because they didn't like the person making the higher offer.

What are your real estate goals? You stated that you want to make real estate your profession but that is a huge topic. What specificially would you like to do? Talk to other professionals on here in what you want to do and then more importantly talk to folks in you local area.

College is important, it allows you to be well rounded. The environment is also very beneficial if you take advantage of it. I did however leave a 4 year school without a degree after 1.5 years. I later got a trades degree and also study daily to continuously grow my knowledge base. You can definately go without a degree but just be ready to work 3 times as hard to make up for it. That decision is worth it for some but not for others.

Account Closed · Answer

When you hire cheap labor except cheap work, it is your fault for not paying more and hiring the best.

Jerry W. · Answer

It is hard to limit my worst mistakes to just one.  First and foremost is I think I never sat down and wrote out a plan.  I just bought and sold here and there thinking I can make some money on that.  While most of my deals did make money, without a roadmap you get no where fast.  I heard that people who write down a plan are 80% more likely to achieve their goals.  Within 6 months of actially writing doen my plan I changed it.  Writing down my plan helped me to plan my next step and set in motion plans for the future, once I started mapping out how to achieve my plan I quickly changed it realizing it was somewhat niave, and to be blunt was way too easy to achieve.  I have to be careful, if a goal is too easy you lose your drive and enthusiasim.
     My second biggest mistake is not being careful enough with chosing tenants.  It was hard to say no to people with money in hand and wait for a good tenant.  Good tenants are a ton less work and hassle.  I manage the bulk of my SFRs now and one bad tenant is more work than 5 decent ones.

Jackie Lange · Answer

Biggest mistake was taking on a PARTNER for a few projects.

Jonathan Flink · Answer

My biggest mistake was not protecting our properties from friulous Law suites. We have that under control now. We have also made the mistake not getting into commercial real estate  yet.

What were some mistake you've made in real estate investing?

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