According to former real estate investor who spent more than 30 years of his career in real estate investment, he’s often asked what are his biggest mistakes and whether he would do anything differently if he could do it all over? According to him following are the mistakes he made in his real estate investment career:
Biggest Mistakes in Real Estate Investing Career
The one thing that he failed to notice when he first started out was macroeconomic view of the real estate he was investing in & where he was located. By this he meant that he didn’t even considered things like job growth & population. Looking back today, many of his cash flowing rentals are in locality that has peaked i.e. job growth in that area is almost static. At that time his numbers worked as the rent being greater than payments, but it wasn’t until he started to invest nationally & started to look at diverse emerging markets that his perspective changed. He started to invest in strong rental market due to growth in things like population and jobs.
The second mistake he made according to him was going alone for first 20 years of his real estate investing career. It wasn’t until he started networking and joined few real estate groups that his business started to grow and the main reason behind it was the sharing of knowledge and strategies by people who had already been in this business and have done it.
The third mistake according to him most people make is that they think it’s too late for them to start their real estate investment career. In reality, it’s never too late as he himself started his career in real estate when he was 29 and his initial goal was to acquire only one house per year. But, in two-year period he was able to buy 16 houses, and then it swiftly rose to 40. Although he wishes he should’ve started investing earlier.
The next mistake according to him was not using leverage. In the beginning, he used to work two jobs and thought that he had to save all the money & then go out to find a deal, but in reality it’s the other way around. We first have to find a deal, & the money will find you. According to him if you already have a good deal, then the only thing you need to find is a money partner and it could be hard money, private money, or it could be a traditional bank.