October 5, 2012 · Leave a Comment
Is the high level of confidence in the current real estate recovery sabotaging real estate investors and the potential profits and wealth they should be accumulating?
4 Ways the New Recovery is Hurting Investors
1. Over Confidence
If real estate is headed up and properties are so cheap no one can go wrong by jumping into real estate investing right? Not exactly. This over-confidence and perception that real estate investing is incredibly easy has led to many novices jumping in without investing in their real estate education first, leading to endless issues with rehabs, tenants and reselling.
2. Pumping Up Property Prices
Of course the flood of new investors into the market has also become a nusance to some where it has resulted in the bidding up of real estate prices at foreclosure auctions and on new REO listings. Savvy investors have certainly found other ways to score big discounts on investment properties but there are definitely some newbies who have ended up overpaying recently.
3. Buying Fast vs. Smart
The unique window of opportunity we are seeing now, the long road of upward growth anticipated ahead and the lack of other attractive investments has many funds and well capitalized investors buying wild with panic that the deals won’t last instead of buying smart. More volume is great but not at the expense of taking on unnecessary risks. Why do more work for lower returns?
4. The Guru Effect
When the demand for real estate investing education soars the wannabe ‘gurus’ come out of the woodwork, some who have barely ever bought a property before themselves and who certainly haven’t proven their systems work or work under pressure. Who are you relying on your real estate education from?
SO don’t be a victim of the real estate recovery; invest in your real estate education first, find better sources of deals and make smart acquisitions.