What no one tells you as a new real estate investor and what could easily bankrupt you is that preparedness and avoiding pitfalls is as important as doing the right things to make money.
Many new real estate investing business owners believe that as long as they push forward hard and make tons of money nothing can bring them down. This may be a feasible strategy if you live in a third world country and can pay off the cops at every turn and bribe your way out of trouble but not for real estate investing in America.
Those who neglect this sometimes unsexy part of their real estate education could be setting themselves up for massive failure just when they think they have finally made it to the big time.
Just ask Mark Zuckerberg who has lost somewhere in the region of $4 billion in the last few days. Of course it may not burn so bad if you still have a few billion to play with but no one wants to lose that kind of cash.
Real estate investors who don’t have a few extra billion in their pockets can find that unforeseen changes in markets, marketing trends, regulations and anyone of a half dozen potential disasters can bankrupt them overnight, leading to horrific consequences.
Part of being ultra-successful for the long term is planning for the unforeseen and unexpected so that you are never caught off guard. If you don’t then there is no one else to blame when it blows up on you.
5 ways to secure your real estate investing success:
- Set aside personal savings and a reserve fund for your investment business
- Maintain good insurance for both properties and your business
- Be careful about paperwork, make sure contracts and partnership agreements protect you
- Distance yourself from liability with 3rd parties when possible. Attorneys, property managers and real estate agents can all be invaluable sometimes
- Stay on top of your real estate education and consider advanced coaching so that you know what will get you in trouble and what not to do