Getting started in real estate investing is very scary! The learning curve is quite high. My first deal was definitely not perfect – but I learned so much from it that I attribute all my recent success to it. It gave me a lot of lessons and momentum to get my investing career started.
Text summary
5 mistakes during my first real estate investment
- I did not use a buyer’s agent. I wanted to learn everything so I decided that I am doing it all on my own. This is not the smartest thing for a rookie investor. Find an experienced real estate agent/ investor who will look out for all your interests, give you all the right connections, and can even be your first investing mentor.
Tip: fInd a real estate agent who also invests in real estate - My initial offer was too high. I found this deal off market, there is virtually no competition and I should have offered lower initially. I made the rookie mistake of giving out my highest offer right off the bat. It was very hard to negotiate from there.
Tip: use a low anchor on your offer - I underestimated rehab costs. Pay a licensed general contractor to walk a property with you. Ask for a detailed estimate as if you’re fixing everything. Once you get the report you can use this as a reference when estimating all your rehabs in the future. Tip: Pay a contractor For a detailed estimate
- I did not get everything in writing. I negotiated hard for repairs in the property; seller agreed and started making repairs. My inspection period ran out and was told it will be finished before closing. It did not happen. It was my fault. I didn’t make an addendum about everything we agreed upon in the contract. Tip: spell out everything in the contract
- I did not start sooner. Fear can paralyze your investing career. It held me back for a while. I missed on a lot great deals because of it. Writing down the worst things that could happen, and things to prevent them is a good start. Then talk to somebody who had experienced those scenarios and had overcome them. Learn from them and take action!
TIp: talk to A Seasoned investor about worse case scenarios