3 Pitfalls to Avoid When Investing in Real Estate

3 Pitfalls to Avoid When Investing in Real Estate

QUOTE OF THE WEEK

“If you really look closely, most overnight successes were years in the making.”

– Steve Jobs –

 

Hi Readers!

As I was reading posts in some of the real estate groups I belong to on Facebook this week, I realized that it’s just as important to know what “not” to do when becoming a real estate investor as it is to know “what” to do.  So, I decided to dedicate this newsletter to that subject.

It saddens me to hear the horror stories of those who learn their lessons too late, after the fact, and lose a lot of time and money.  Years ago, I was one of those people.  That’s one of the reason’s I’m doing this newsletter.  I want to help others avoid the mistakes I’ve made.  Sometimes, when you’re stubborn and bull-headed (a-hem!), the only way you can learn is through trial and error.  If you stay in this business, you’ll get plenty of that anyway, but you don’t have to bulldoze your way through every wall when you can walk through some doors.  I hope by doing this newsletter, I can provide one of those doors for you.

In my Inspiration Corner this week, I just wanted to share with you what I’ve been spending a lot of time researching lately and that’s understanding manifestation.  It’s something that’s been a part of my spiritual practice for a while but I’ve just been gaining more insight in to it lately so I wanted to share that with you.

Last but not least, please support our Partners here on the page so that we can continue sharing these insights with you.

Without further adieu, enjoy the read!

Lena W. Claybon
Co-Founder/CEO

Feature Story

3 Pitfalls to Avoid When Investing in Real Estate

So,  you’ve seen your umpteenth Youtube video with the guy in his neatly pressed button-upped white T-Shirt grinning ear to ear waving his rock-solid no-money-down rags-to-riches real estate investment course for 3 easy payments of a gazillion dollars (but only if you call now) and now you are thinking, “Wow this looks like a great deal, I better get it fast before the special offer expires.” You notice how there’s always a special offer?

Anyway, what a lot of these courses don’t tell you are the things “not” to do.  In real estate investing, there are several pitfalls you need to avoid before plopping down your hard-earned cash for property.

Pitfall Number 1: Don’t Overpay!

The whole point in investing is to find properties that are undervalued, then add value and sell them at a profit.  Even when buying rental properties, you want to look for undervalued properties so that, once purchased, you have instant equity in that property and you can make your investment dollars back in a reasonable amount of time.

How do you find out what is undervalued versus overvalued?  Without getting into technical details, the bottom line is you need experience. Yes, much like shopping for anything else, real estate is essentially one of the highest ticket items in the shopping center of life.  Therefore, you need to study trends and prior sales in your market before making any purchases.  If you’re diligent, you will eventually have a feel for the pricing in certain neighborhoods, and then be able to identify what is considered a good buy.

Pitfall Number 2: Start Where You Are

When I first started in real estate, I thought buying in a larger market would automatically mean I’d make more money.  Man, was I wrong!  Because I didn’t know the market I was trying to “buy” in, it ended up being a big waste of my time and money.  

I learned the hard way that it’s best to start where you are.  You have to KNOW the market you’re buying in. 

So, once you have identified general trends in the value of homes, and are pretty good at spotting undervalued homes, you want to determine what investment strategy best fits your financial goals.

For one, most markets appreciate in value over time, so if you want a long-term approach, a “buy and hold” strategy will work.

For a short-term fix and flip, when making upgrades to the property, think in terms of what the market wants, not what you personally want. You aren’t the one buying it; you are trying to sell it to someone else for a higher price than you bought it so don’t skimp on the repairs. 

It also helps to know the difference between a “buyer’s market” and a “seller’s market”.  Knowing “when” to buy is key if you really want to be successful in real estate investing.

Pitfall Number 3: Know Your Budget

It may be great to “wing” it when buying low ticket items like clothing or shoes, but real estate is serious business, and requires diligent financial planning and budgeting or you could end up very broke.

Don’t worry, you don’t need to be a financial genius, however you need to be disciplined and know your budget from the onset, or you may end up way over your head in renovations or upgrades that may break your budget.  It’s always smart, also, to add at least a 10% contingency because things do and always will go over budget.  As long as you plan for it, you should be ok.   

The bottom line is get educated and make a plan before actually going forth with investing in real estate.

Inspiration Corner

I’ve been reading a lot lately about manifestation.  

It’s something I’ve practiced for many years and have experienced times when the techniques I used worked like a charm, and other times when they didn’t seem to work at all.  I’ve been delving further into why this is.

One thing I’ve come to know is no matter what religion you come from, anyone can use manifestation techniques because manifestation is a science, not religion-based.  I’m not saying that you shouldn’t pray for things but even the Bible talks about “praying amiss”.  You have to know “how” to pray.

Same thing with manifestation.  You have to know how to manifest. There are laws that govern the process of manifestation. Once these laws are complied with, just like the law of gravity or electricity, anyone can use them to make changes in their lives.

This may seem very unbelievable to some, but the truth is it’s very real. I don’t have room here to go into all you must do to make manifestation work for you, like understanding the difference between your conscious mind and subconscious mind and how they both work.  But I encourage you to study it for yourself.  There’s tons and tons of information online that deal with this.

But here are three things to get you started:

  1. Focus on where you are going and what you want, not on where you are and what you have
  2. Talk about your life as if you already have what you want
  3. Release your attachment to the “thing” you want
 
One thing I can tell you is everything you desire begins in your mind and it is the mind that brings these thoughts to life. Therefore, you must learn how to use your mind in order to get what you want in life.

And remember, Rome wasn’t built in a day.  It takes time to learn it, process it and begin to train your mind to work with these laws.

We live in a Universe of abundance, although many view it as a Universe of scarcity. You can learn skills to activate this power through these Laws to achieve wealth, financial freedom, and success.  When you learn to take control of your thoughts, and use your mental powers in the right way, you will start manifesting your desires like a master!

Namaste

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