all right what's going on everybody so today's video I'm gonna be going over
the top seven real estate investing mistakes I see happen all the time so
some of these things absolutely drive me crazy so in this video I've actually
compiled a list of the top seven mistakes I see newer real estate
investors make as well as even sometimes experienced ones so mistake number one
would be listening to the wrong people so real estate investing it's kind of a
I don't know if it's controversial but everyone wants to talk about it so as a
real estate investor especially if you're getting started you should only
listen to like the top 1% of people out there that means you should only listen
to people that are actually real estate investing actually making money in the
business because the thing about it is is everyone has an opinion I people tell
me every day oh this doesn't work that doesn't work and you know I don't want
to like show them checks and things like that but at the same time in my mind I'm
thinking like you're not a real estate investor you've never done real estate
investing you know your real estate investing opinions are coming from like
the one house you bought like 10 years ago because people like your neighbor
coworker you know just different people they'll always try to tell you real
estate investment doesn't work or maybe they'll have just like some people just
have like crazy theories about real estate investing and you know everyone
has like their own little theory everyone has an opinion about it but you
really need to seek out like the top people in the field that are actually
making money doing it and only listen to them
and the way you listen to these people and the way you find these people are
the first freeway would be podcast there's hundreds if not thousands of
freely available real estate investing podcasts where you know you'll find out
all about the real estate investor you know how they got started what types of
deals they do what markets they were in what challenges they had and actually
it's funny because if you listen to these you'll hear the same thing people
will always say yeah when I got started nobody said it would work now I'm still
doing it and people still don't think it works so really seek out the top 1% of
people out there and a couple other ways to find those people are coaching
programs you I joined I joined plenty of coaching programs and I continue to get
you know to be involved in coaching I think it's a great investment any time
you're investing in yourself I think that's always a good ROI and you can
also you can also get a free mentorship if you just start generating leads for
the top investors in your area like just off market leads and sending them over
to the top investor often times they'll help you get the deal under contract and
kind of coach you up along the way in fact I know plenty of investors that
will just train newer investors in their own market how to find deals like for
free in exchange for splitting the deal like
50/50 and different splits like that okay the next mistake I see investors
make is uh they jump on the first deal too often so as a real estate investor
you need to be very picky and very particular about the types of deals
you're looking at so I think Grant Cardone has a saying where he says like
the rule of a hundred so he'll look at a hundred different deals before he
purchases one because I know when one of the biggest mistakes I made when I was
first getting started I bought a condo and I didn't really
look at that many Congress I just kind of bought it because it was cheap and it
was like close by but if I had evaluated like 25 or 50 or even 100 condos I could
have probably got like an amazing deal and when I say evaluate I don't
necessarily mean you don't need to go to like every single property in person
this was the amount of information online you can find out so much about a
property without you can go in there so you need to like at least have looked
online at a very minimum and at least a hundred different investment deals
before buying one because that will help you understand what a good deal is and
what a good deal isn't because like now if somebody calls me I know almost like
within 30 seconds whether it's a good deal or not because you just you just
start to get an intuition for prices different neighborhoods things like that
okay so mistake number three is not having a system or formula for buying
houses so when I was getting started we were just purchasing houses just because
the property was cheap and we're like well if you purchased it at 200 and it
needs 50,000 worth to work and you can sell it at 300 you know there's a 50k
margin in there it's probably a good deal but we didn't really have any type
of like formal system and so the way you get a system
the first system I'd recommend is using the male formula Mao formula so what
that means is you take the half - renovated value so you would find comps
in the neighborhood of like ideally three renovated properties of similar
style square footage and everything like that and you would multiply that number
times 0.7 and then you subtract for the cost of repairs that the house needs and
that should be your most that you could offer the maximum allowable offer and if
you find deals even like kind of in that ballpark you should be good because that
type of analysis gives you a lot of forgiveness and builds in quite a large
profit margin as well so don't just buy properties just because it sounds cheap
and you can sell for hire you know I actually run your numbers and I use a
combination of two things I use that and I also use a deal analyzer so the Mayo
formula will get you kind of like right in the ballpark price where you need to
be at and then the deal analyzer will make it more specific so I might tell
you are you gonna make twenty thousand you're going to make
you're gonna lose 20,000 you're gonna make 50,000 so I like to use a
combination of both and if you want to get the deal analyzer that I use I just
go to my website I'll put a link to it below so you can check that I've just
download it for free and it's the one I use on a day-to-day basis okay mistake
number four I see is real-estate investors that sometimes they'll start
are like a massive project is here as their first couple deals and sometimes
that's okay like if you come from a construction background I would say you
know maybe you could do that but ideally you want to start with a small project
and kind of build your way up to the bigger projects I was actually just
talking with my brother about one of the biggest developers in our city he just
built a wharf it's like a two billion dollar project one of the biggest
projects in the United States and this guy got started by just flipping like
row houses small row houses in the city and then build his way up to that but if
he were to start with that type of project it would just be like insanity
sometimes I'll talk with students and they'll they'll ask me about some deal
that they're looking at and it might involve you know building like 10
townhomes or no planning a whole community and I'm just like that's just
out of your league right now just just start with like little flips in your
backyard first before you go ahead and do that okay mistake number five I see
is putting too much trust into real estate agents and wholesalers so I'm not
saying real estate agents and wholesalers are out trying to like trick
people or anything like that but I get leads like in my email you know I
probably get 10 20 leads per week per month from wholesalers and real estate
agents send me like amazing real estate investment to you like the perfect deal
everyone has like their tagline and the way I look at it like most deals are not
great you know I might get like if I get 10 leaves there might be like one
possibly good deal in there so just because a real estate agent tells you
you might make a hundred thousand or there's some huge difference in price
and it's an amazing deal and prices are going up or wholesaler tells you the
same thing or sometimes wholesalers will say oh the house only needs $20,000
worth of work that doesn't make it true at all so I do a lot of online marketing
and offline marketing get a lot of leads just directly and then I get a lot of
referrals from agents and wholesalers and I look at a lead that's a referral
almost the same way I look at just any lead I would just generate by myself
like it's I still need to take it through the deal process so I'll still
run it through my numbers I'm not just gonna blindly take the opinions of a
real estate agent or wholesaler might just want to make a sale so so you know
trust them and you should build a network as much as possible then build
your list with them as much as you can you know you should do networking
events tell them hey you know if you find any good deal sin in my way I'll be
interested but don't automatically assume it's a good deal just because
they're sending it over and they say it's a good deal okay mistake number six
I see is people over doing their rehab so when you're doing a renovation
project do you want to you want to be at the higher end of the prices and the
finishes in your neighborhood but you don't want to be like over the top
because sometimes I'll see people get like too excited it's their first deal
and they'll want to do like just crazy additions I've seen some houses I've
looked at where there was like marble floors like marble tile like everywhere
and it just didn't even like fit in with the neighborhood and someone would
actually have to like rear enovate that so we're gonna have to tear that down
and do their own renovations just to make it look like a normal house
so be sure when you're looking at comps for your area you try to find the best
properties and then try to model those and maybe do things a little bit nicer
but don't go overboard don't go over the top with your renovations you just want
it to be the nicest in the neighborhood but you don't want it to be like unusual
like unusually nice or unusually bad for for that matter okay mistake number
seven I see is not having a detailed scope of work so let's say you're doing
a project like when I first got started you know obviously we had a contract and
we even oftentimes just tell them hey just renovate the bathroom or renovate
the kitchen and what I think is a renovation versus what a contractor
thinks versus what somebody else thinks is renovating it's going to be
completely different so you really need to iron out exactly what you know what
you want and the way you do that is with a super detailed scope of work so you
should list out like SKU numbers of let's say the appliances the exact type
of granite you can have photos of the exact type of kitchen or bad things that
you're looking for so combination of photos SKU numbers and just being very
specific very detailed with what you're looking for you know print it out have
it at the job site as well as walk through the project with your contractor
a few times just so they really understand alright so those were seven
mistakes and I actually have one more mistake I've seen too many real estate
investors make they try to list a property for sale by owner and look
there's ways of saving money on any deal but having a for sale by owner in my
opinion is not one of them if I'm ever looking at a house that's a for sale by
owner and I honestly don't look at too many of those properties there's always
just something weird about the property it feels like they're just trying to say
they're going too far to try to save money it's almost like they're they're
cutting corners and just feels a little janky they have a janky side
it's sometimes really hard to show the property sometimes the oftentimes the
price is significantly higher than the comps so anytime I see a for sale but I
just think someone's trying to cut corners if they're cutting corners on
the agent you know I wonder what else they're cutting corners on so you need
to present your property in the best light possible and in my opinion the way
to do that if you want to get your property sold fast for the maximum
amount you should get a highly rated local real estate agent you should get
professional photography which which any good real estate agent will provide and
then you should also have the property staged so some people don't think
staging is worth it but I can guarantee you staging is absolutely worth it every
property that we staged and we pretty much staged every property now gets sold
faster than properties that we don't staged and I can't tell you how many
vacant properties I've been into that they just don't without any furniture
it just feels sterile it feels cold it feels uninviting so get good pictures
stage your property and use a highly rated local real estate agent okay so
there you have it seven mistakes really eight mistakes I see real estate
investors make don't make those same mistakes and thanks for watching please
subscribe please share and I'll see you in the next one bye bye