Real Estate Investing Video Series: 5 Biggest Mistakes First Time Real Estate Investors Make

real estate investing video

by Ronnie Adams

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Welcome to our real estate investing video series. Today’s Quick Tip highlights the five most common mistakes made by first time real estate investors. These are the mistakes you’ll want to avoid as you begin your journey toward investing success. Ronnie also talks about some of the mistakes he’s made, and how you can avoid those as well.

Make sure you check out our related podcast, where we go into real estate investing mistakes in more depth and give you some tips on how to avoid them. Tell us what you think. Leave a comment below. We hope you enjoy it!

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{ 3 comments… read them below or add one }

Jeremy Johnson February 26, 2010 at 8:54 am

This is kind of a long comment, but I like your site. Here’s some feedback:

Hey guys, just wanted to say that was a very informative video. The whole idea of just getting started in investing is where I see most people stopping. If I were to pinpoint it, I’d say the fear’s are (for myself included):

* Don’t know where to start
* You’ll lose money
* You’ll be stuck with a property that nobody rents
* You’ll have to spend too much time dealing with tenants/fixing stuff

Going to try and answer my own questions here, and your site does address some of these. I’ve poked around it a little bit and forgive me if what I say is already exactly addressed. From my standpoint, if I saw information right away covering these in detail – information right in my face, my confidence would go up in real estate investing:

1. For not knowing where to start, there are probably two strategies that I can think of: flipping properties (buying, fixing up, and selling); renting (buying, renting long term and having the appreciation be a gain too)
–> A guide on both of these would be valuable to someone like me just starting out. How do you get the money for a house (you guys mentioned broker and bank). Knowing how to contact each and see if they are ‘shady’ would be cool. What the best things to fix up in a houe for increasing value would be good. I think if people can see and know some choices they can make and feel like they can contact a bank/broker, get started, find a good house, fix it up if necessary, learn how to rent and take care of all the legal paperwork easily (blank documents for all the contracts would be extremely useful), then more people (including me) would do it I think.

2. For losing money, I’d have to confront this and say, “Ok, how can I lose money?” And then I’d say: buying a house with no renters (monthly payment); house goes down in value; house gets wrecked in some way; I lose my job and can’t pay for the house (and have to sell at a lower price)
–> I think confronting each of the scenarios of losing money would be valuable – I know for me, I hear most people who buy properties saying, “I can’t get renters and I’m losing money.” I think those people obviously made a mistake. I think specific real life scenarios of how people made money making good decisions (and even losing money making bad ones) would be useful here as well.

3. For being stuck with a property nobody rents (kind of ties in with # 2 here), I’d want to know how this happens, what makes a house not get rented? Such as the neighborhood being crummy; no useful employment nearby; the house is not appealing or run down; or the economy is just awful in that area. I think it would be useful for some kind of guide where information like this could be solved easily. Such as: here’s an easy process for fixing up a house. Here’s what renters want in a house. Here’s how to tell if there is good employment in a city; and maybe saying – take pictures of not only the house, but the surrounding area – or even put up some videos of the house and surrounding area.

4. Spending too much time dealing with tenants/fixing stuff. Most people I talk to don’t do real estate because of this fear. They don’t want their lives controlled by tenants, and they don’t want to pay a preoprty management company hundreds of dollars a month to do it. Information on how to not let tenants control your life would be awesome. And a guide to property management would be useful. My thoughts are that tenants will not control your life if you screen them (a guide to that would be useful), and have the house in top working condition. There’s probably a way to make money and hire people to keep the house up and if you have done that, that’d be useful. And for property management companies, when it is good to use one, and when it is not. Seems like if money is tight you wouldn’t want to use one, but if you have some extra cash and the house is going to appreciate over time, it would be ok.

Found your site via a friend. Always thought about real estate investing, but so far I have my work 401K and a Scottrade stock account. Real estate is definitely on my radar – love your site, found it via PlantingDollars.com. Great job on your video – you’ve already answered some beginner questions on your site and are very personable and real. Keep up the good work guys.

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Vance Poindexter February 26, 2010 at 1:45 pm

Hey Jeremy! I saw your comment on plantingdollars.com to the interview Ronnie did. Thanks for the love. This comment is outstanding! Our goal is to provide information to investors so they can succeed. The fact that you put yourself out there and admitted you didn’t have all the answers is commendable. Ronnie and I will work to address EACH and EVERY item you brought up above. Thanks.

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Cable Dupont December 12, 2011 at 12:22 am

For beginning investors, it is often hard to notice when things are changing and when to make adjustments to your plan. In my case, I simply needed to talk to more investors and be willing to listen to their advice. So often, an investor needs to be saved from themselves and the bad decisions they are making and they need a trusted adviser to just nudge them one way or the other to keep them on the right path.

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