Real estate investors love to talk about the latest super deal they just put together and all the money they’re going to make in monthly rent or when they “flip the house”.   I think it is fantastic that so many real estate investors are successful, and many have become millionaires.  

Recently, I interviewed several real estate investors and asked them, not to tell me about all their riches, but to share with our members and me some of their Biggest mistakes.  Listed below, in no particular order, our the best of the Biggest mistakes real estate investors make: 

1.     Not knowing the specific local market where you are buying a house to fix & flip.

2.     Ignoring monthly holding costs when rehabbing a house for a quick re-sale or to rent.

3.     Not having a budget, and sticking to it.

4.     Not doing the proper and thorough due diligence prior to purchasing the property.

5.     Over-investing in a property you are rehabbing. It doesn’t need to be perfect and remember you aren’t going to live there.

6.     Being so overly consumed with cash flow that you rent to anyone just to fill a vacancy.

7.     Running your real estate investing business like a “hobby”.

8.     Don’t play the game as a “lone ranger”. Seek out other experienced investors and ask questions; get advice and recommendations.

9.     Not having professional tax and legal advise.

10. Getting too Big, too fast.

11. Not protecting each property with proper liability insurance.

12. Being too lenient with tenants.

13. Allowing a tenant to move in before receiving ALL the security deposit and the first month’s rent in full.

14. Not providing the tenant with a “move-in” inventory checklist.

15. Failing to take care of a problem tenant NOW. It will only get worse. 

16. Not sending out “7-Day Notice to Quit” on a timely basis.                           

17. Underestimating your own skills and abilities to rehab a fix & flip.

18. Overestimating your own skills and abilities to rehab a fix & flip.

19. Failing to get a least three estimates for a major project; new roof, furnace, replacement windows, siding, updated electrical service, main sewer replacement, etc.

20. Failing to register your rental properties with the local municipality.

21. Not having clear, concise and well-defined real estate investment goals.

22. Not effectively marketing or advertising your properties For Rent or For Sale.

23. Not answering your phone or returning calls on a timely basis.

24. Underestimating expenses and time to rehab a house.

25. Not being a member of REIA of Oakland.

Contributors to this article were Dale E.Proulx, Randy Michael, Rick Pridemore, Don Eichstaedt, and Chris Yatooma.

Ron Watcke, Board Member