There are certain careers that are deemed sexy. For the most part, they fall into two categories; it gives you freedom or you are in a position of power. As a real estate investor, you are able to go in between the two. Most of the time you are able to pick up and do it wherever you want, and likely you are your own boss. This makes real estate investment sexy to most people. It is also the reason many people jump into the real estate investment career path.
With so much competition in the real estate industry if you are not careful you could run into a few walls. In fact, in your first year, you may quit. So, here are a few setbacks you should avoid when you are taking on your first investment.
You want to have someone in your corner
For some people owning their own business is a top priority when entering the working world. For the most part, you are able to do this when working in real estate, but you have to start from the bottom first. It is safe to say that your father did not give you a small loan of $1 million to start your career, so to get ahead you will need a partner. Some newbies may need more than one partner to help them.
Not asking for help on a deal or for information on a new find is a huge mistake. Yes, there will be times when your colleagues in your radar will try to take care of the competition, but you will need those people, as well. It is the symbiotic relationship that you share with other investors that allow you to grow in the business.
Make sure you are getting out of your comfort zone. In California, there are conventions and conferences that you can attend to meet people. Hard money lenders in California frequent these places often. Since you will likely apply for loans this works to your benefit. Having multiple partners that specialize in different areas will help you build your company.
Overestimating the value of a property can cost you money
Once we complete a project it is common to be proud of what we did. It is expected. You spent hours planning on the different type of tile you want for the backsplash. You talked to at least ten hard money lenders in California trying to get a quick bridge loan for the property. Now, you want the recognition for the hard work you put into the home or property you bought. So, you decide to overprice the actual value of the home.
Many novice investors will do this, and it is understandable, but you must also realize the market does not always work the way you want it to. Just because you had to pay a large sum of money at auction does not mean you will get all your money back.
Depending on the economy, geography and a bevy of different factors you may need to lower your price to sell your property. No one said it would be easy, but you have to stick with it to win in this game.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.