10 Lethal Mistakes to Avoid on Your First Real Estate Investment

Your first investment will be a learning process. While you will definitely make a few mistakes along the way, there are a few common mistakes that can be avoided if you educate yourself beforehand.

Here are some of the pitfalls that you can avoid to help you steer you down the best path possible to your very first real estate investment.

1. Bad Financing - Always work with the mortgage broker who is investing in real estate or is actively working with investor clients

2. Bad Location - Location is very important to attract excellent tenants who will be willing to move in and rent your place for a while. Huge turn overs due to bad location could turn challenging to meet your expected returns on investment

3. Misjudging Resale or Rent Value - Make sure to understand how our end customers (renters and buyers) make buying decisions and then translate them to value. Having a qualified professional to help you in this area will minimize the risk

4. Underestimating Repair Costs - Underestimating repair costs in your analysis could be very costly. Always have a professional in your team to help you with this.

5. Running Out of Cash - If you run out of cash, even the best investment property will hurt your wealth building. Common mistakes that could deplete your cash might be underestimating repair costs or future capital expenses 

6. Letting Emotions Drive Your Decisions - Balance your enthusiasm with cold, hard and objective analysis. Have a checklist and stick to it.

7. Choosing the Wrong Real estate Strategy - You won't find a perfect strategy but you can find one that pretty well suits your unique strengths, your short term needs, and your long term goals.

8. Choosing Bad Contractors - Get referrals and work with ones who will do great work and finish up on time.

9. Not Using Your Due Diligence Period - critical as a newbie investor not make offers with fast closings, in as-in condition, and with no due diligence period. You may get a lower price, but for your first deal this is not the best route to go

10. Not Learning From Your Mistakes - Doesn't matter what you learn and implement, you will eventually make a few mistakes along the way. Create your own personal School of Hard Knocks education checklist. That will be an invaluable education for a successful venture into real estate investing.

The successful real estate investors aren't perfect. They have scars to prove all of their past mistakes. But they learn to avoid the fatal mistakes that would knock them out of the game. And they learn to always keep moving forward.