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People from all walks of life flock to the idea of investing in real estate primarily because it has always been a major source of wealth creation in the United States. Billionaire Andrew Carnegie once said that 90 percent of millionaires got their wealth by investing in real estate. This is because real estate is a tangible asset that offers a predictable cash flow, appreciation in value, equity growth, and high returns due to leverage. So, then why is it that so few people are able to get past the learning curve and start making real money?

Having been in the real estate game for a while now, I have seen many first-time investors struggle to stay on top of the game. Sometimes it takes getting into the game to learn that real estate is by no means a “get-rich-quick scheme,” but rather a long-term process that involves patience, skill, and a strong understanding. Mistakes are a common occurrence and even expected when jumping into the game, however, what I’ve learned is that many of these mistakes can be avoided with smart preparation and careful knowledge. If you equip yourself with the right amount of research and diligence, you can avoid the major pitfalls that might land you on your back!

The Three Biggest Mistakes Real Estate Investors Make

1. Forgetting the Importance of a Good Team

I’m going to be honest with you when I say that the difference between a good and great real estate investor is their team. When you’re getting started, you can really give yourself a boost by making sure that you are surrounded by the right people. Real estate is all about building long-term relationships with people that you trust. If you want success, you have to start thinking of real estate as a team sport.

You need an experienced real estate agent who can assist you in finding the perfect properties. You need a seasoned mortgage broker who will protect your financing. Not to mention, you should also have a lawyer, property manager, contractor, home-stager, property inspector, tax accountant, and more on your team. You can think of the old African Proverb that says, “If you want to go quickly, go alone. If you want to go far, go together.” Each team member plays a vital part in your overall success. If you’re in the game for the long haul, you will be stronger and go further with a well-built team by your side.

Another quick tip of advice is to always try to learn from the experiences of other investors. If you know someone in your life, or even online, that has experience investing in real estate, ask them to become your mentor. Learn everything you possibly can from them so that the next time a problem arises, you will have a knowledgeable resource to turn to. A great real estate mentor will only help to magnify your success.

2. Miscalculating Costs and Estimates

One of the most problematic challenges real estate investors face while buying or owning rental properties is maintaining enough cash flow to keep up with maintenance, repairs, and costs. When investors fail to research the impact that additional expenses can have on cash flow and appreciation, they often end up overspending or losing money. I always recommend putting extra money aside for emergencies. If a pipe bursts at one of your rental properties, you’re going to be the one held responsible and that means money coming out of your pocket. As a wise man once said, “always expect the unexpected!”

If you’re planning on fixing and flipping properties, it’s essential that you try to analyze any renovation and repair costs before you get in a position where you’re a little too over your head. If you own several rentals, there’s a good chance that a few might sit vacant for awhile. In this case, you will essentially have to pay that same monthly costs as one of your renters would. As you can see, there are a lot of scenarios that require investors to have an appropriate handle on their cash flow. New investors should even keep in mind the soft costs, such as real estate commissions and legal fees, that may arise unexpectedly. Keeping a tight grasp on financing and giving yourself enough financial leeway will prevent you from any from worst-case scenarios.

3. Giving Up Too Soon

Have you ever heard me say, “real estate is simple, it just isn’t easy?” Most beginner investors don’t recognize how difficult a business this is and they become discouraged at the first sight of difficulty. Because of the nature of this business, there are bound to be days where you feel defeated. Days where everything seems to be falling through the cracks. I know because I’ve had more of these days that I can count. I’ve failed more times than I’ve succeeded but I’ve managed to find tremendous opportunities to achieve financial freedom simply because I didn’t give up.

As with any business, you are going to encounter challenges and difficult situations. But it’s your choice on whether or not you will use these roadblocks as an opportunity to learn or if you will let them define you. We learn what we’re really made of when we push through our challenges and come out stronger on the other side. Keep showing up for yourself and your future!


If you’re serious about investing in yourself and your future, I hope you consider attending my Real Estate Workshop this June. I host this workshop twice and year and at the end of every event, I have attendees walk out the door and email me years later with a list of properties they have successfully invested in. I’m not telling you this to boast but rather show you that anyone has the ability to better their future. When you invest in real estate, you not only set yourself up for financial freedom but you also give yourself the ability to build wealth for the kingdom. Join me, Bill Bronchick, Karen Conrad, Dan Dyer, Mike Davis, and Chris Barnard on the weekend of June 12-14th in Denver, Colorado to learn more about how you can become an expert real estate investor. Click here for more information and to purchase your tickets.