Real estate investors are making this mistake right now and it is setting them up for massive failure…
Critical mistakes in real estate investing strategy and poor acquisitions cannot only meaning being stuck with one bad, dead weight deal which sucks time and income every month for years but can quite literally result in devastating financial and personal consequences for a decade.
So what is the single worst possible mistake a real estate investor can make?
Right now, at this very moment some investors are buying homes with negative equity. This isn’t even just a case of accidentally overpaying a few hundred dollars by being seduced into bidding high at an auction or paying full market price because they failed to do their homework.
Believe it or not, some of those getting into real estate investing even recognize that they are overpaying, and overpaying for properties by tens of thousands of dollars and are trying to rationalize it!
Of course some savvy wholesalers and flippers reading this are seeing green and wanting to know where they can find more crazy buyers like this, but it is a shame and ultimately isn’t good for anyone in the industry.
No matter what the ‘pros’ of a certain property, purposely overpaying and, worse putting thousands of your own cash in to one of these deals is just foolishness.
Of course some may make out OK. With a new boom they may be able to break even and cash out and a few may even make big profits on speculation, but it is certainly risky and just asking for trouble.
It isn’t that these investors are unintelligent, perhaps it is more laziness, because there are certainly still plenty of decent deals out there and there are literally hundreds of billions of dollars in foreclosures coming through the pipeline.
Don’t forget the golden rule; “make your money when you buy”, even if this is positive cash flow and a small sweat equity cushion. If you don’t, you could find yourself joining the ranks of thousands who failed in last bubble.