When I first got started in real estate investing, I was the poster child for mistakes! The one thing I did PROPERLY was that I took action. And success favors the people that take action.
The key is to keep moving and not dwell on each individual real estate investing mistake that you make, especially early on! Just keep on going… and take a few minutes to figure out what the lesson was, add it to your knowledge and experience bank, and move on to the next!
In this article series, I’ve highlighted 17 real estate investing mistakes that I made early on and share with you what you can do to avoid making the same real estate investing mistakes I made…
The first mistake new real estate investors make is always thinking the grass is greener on the other side! That “another” market will have better deals, more motivated sellers, and more qualified buyers. Once your business is established with duplicatable systems in place, it can be easy to expand into additional markets. But in the beginning, stick with your targeted farm area.
Mistake #1: Working outside of your farm area
The first property I ever bought was 4 hours away! I was living in Miami, Florida and the property was located in a bedroom community between Orlando and Daytona Beach.
This was about 4 ½ hours away!
You really want your first deals to be close enough to home where you can manage the deal from start to finish. This doesn’t matter if you’re wholesaling, rehabbing or acquiring a rental portfolio. Obviously, wholesale deals are someone easier to do virtually.
Take some time to figure out your tolerance threshold and how involved you need to be in the deal. Although it doesn’t have to be in your backyard literally, you probably don’t want to be driving 4 ½ hours to meet with the homeowner, show the property potential buyers, deal with contractors and handymen, etc.
You might be surprised just how many deals you can find within a 20-mile radius! (after my first deal, I did about a dozen properties in my first year in ONE neighborhood!).
How to Avoid Real Estate Investing Mistake #1
The solution is simple!
Target a specific farm area close by and work it in depth.
Sure, I know YOUR market is probably saturated and that there are no deals left. (wink wink!). But here’s a secret — everyone says that about their own market!
The grass is always greener on the other side.
When I was full time in rehabbing, I would REGULARLY close deals that had $20,000 – $40,000+ in profits month in and month out.
Thank goodness my market was saturated with other investors!
A side note about finding deals close to home…
- Choose a target market, a TYPE OF SELLER to focus on (foreclosures, absentee owners, divorcees, expired listings, etc.)
- Choose a communication method (direct mail, driving for dollars, advertising, etc.). Direct mail is not a target; it is a method of communication.
- Choose an exit strategy (wholesale, retail, rental). Again, this is what you are going to do with your deals; it’s not a focus.
Don’t get caught up looking for greener pastures somewhere else. You will be surprised what’s available in your own backyard. If you’re looking elsewhere, you’re likely just procrastinating and making excuses.
And I’ll leave you with one of my favorite quotes: “You can choose to make money or you can choose to make excuses, but you can’t choose both, so stop procrastinating and choose one! “
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