The Investor’s Guide to Top Stupid Mistake Avoidance- A short and sweet summary of wise investing
1. Don’t enter any transaction without first having a plan. Hope for the best, but have a plan for the worst. If the property doesn’t sell, do you have a lease option thought out? Don’t ever purchase without a good idea of several options of what you plan to do with the property.
2. Don’t think you will get rich quick- that kind of thinking is dangerous as you will make risky moves thinking this is the golden egg that buys your future. Investment is hard work, like any worthwhile endeavor and should be approached with that mindset.
3. Don’t go it alone- surround yourself with a network, a team of savvy and supportive people that will help each other in reaching their investment potential. A minimum support network includes a real estate agent, an appraiser, a home inspector, a closing attorney and a lender. The more professionals who mutually support and respect each other, the greater potential for investment recommendations you will receive.
4. Don’t pay too much for the property- do your homework and know your market. If you overpay from the outset, your profit margin is already compromised.
5. Don’t think you can skip homework now that you are out of school- do the research necessary to make wise decisions. Your investment decisions are only as sound as your knowledge of the market.
6. Don’t underestimate your cash flow. You need to have money for unexpected eventualities, which will always crop up. Expect the unexpected and plan for it, so that you will not find yourself out of cash by lost rental revenue, or large repairs. Plan for worst case scenarios, and if you can still afford it, it is a good deal.
7. Don’t do just one thing well- you must have volume- have multiple transactions in the pipeline at all times. You spread the risk and increase the potential for productive deals to materialize.