10 Most Common Incorrect Beliefs by Inexperienced RE Investors

[Don Konipol]

Most Common Incorrect “Facts” by the Inexperienced

1. It’s “illegal” to purchase a property without the approval of the existing note holder (subject to)

2. If a property owner stops paying on a note the lender just “takes” the property

3. That there’s ONE foreclosure law in the U.S., not 51

4. That real property ownership is indivisible rather than a “bundle” of rights

5. That real as well as personal property rights isn’t under attach by political forces in the U.S.

6. Real estate prices always go up

7. Mortgage rates of 3 -4% are the norm

8. That real estate gurus / mentors have been successful in their real estate investing careers - if they ever actually had one

9. With no experience, knowledge or capital they can be successful by attending a weekend workshop 

10. Lenders are lining up to provide down payment, “gap” financing, and earnest money deposit financing so that they, with no experience, no capital, and no knowledge can purchase a property they incorrectly analyzed as a good purchase, for “nothing” down.

[Don Konipol]

Quote from @Gregory Schwartz:

6. Real estate prices always go up

Real estate prices have always gone up over a long enough time horizon on a national average..... but yes, on a year-over-year basis or in a specific city or town your experience may differ 

I have to disagree - kinda.  If you were to buy a “basket” of real estate diversified over our entire country, then yes, you’d be correct. But, property in certain specific parts of our country have shown price declines (in real terms, accounting for inflation) over the last 50 years. 
A perfect example of this is Detroit, where a friend of mine purchased 100 SFR in 2011 for $300k, or $3,000 per house. These homes were built 50 years earlier and originally sold for $10,000.  Detroit is “supposedly” making a comeback, but it went from a population of 1,650,000 to 600,000 in 50 years.