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12 Rookie Pre-foreclosure Mistakes And How To Avoid Them Like The Plague
Robert Kiyosaki said, “The most expensive advice in the world is free advice.” This is the advice you get from your inexperienced and uneducated family and friends. Many rookies who fail do not find the right mentors to help them - this is a critical mistake. Especially for a rookie real estate investor. 2) Never Taking Action Many rookie real estate investors never get past the “Barnes and Noble Stage” if you get my drift here. These people will read countless books and listen to all the tapes on real estate investing, but never take the plunge and get into the game. 3) Wasting Your Spare Time The majority of those who struggle have to have a job in order to support themselves. A job demands most of your time and attention. We all have a certain amount of spare time - free from obligation. Most rookies do not take advantage of this time and therefore suffer the consequences. Jim Rohn says we should plan on searching for new opportunity every week - make this a habit. How are you going to find new opportunity, if you're not searching for it every week? 4) Not Having A Clear Purpose In my opinion, 97% of people don’t write down their goals so I can safely say that even a smaller percentage have taken time out to define their purpose. If you don't have a clearly defined purpose, how can you know where you are headed? 5) Not Having A Plan Of Action This one is very simple. All relevant information must be written down and carried with you at all times. No exceptions. 6) Buying In The Wrong Neighborhood Just because the price is cheap doesn’t make something a deal. If there's trash all over the place, hit the gas and keep on trucking.’ 7) Paying Too Much For A Property Most pre foreclosure rookies fail to learn the basics of investing.Never pay more than 50% of the after repair value of a property. Especially in today’s market. 8) Negotiating With An Unmotivated Seller If there is not a compelling reason to sell the property – punt and move onto the next opportunity. Don’t make the mistake of trying to negotiate with someone who’s out to win. You'll always end up losing. 9) Not Creating The Correct Legal Entity I am not an attorney so please consult someone locally before attempting this. Whew! Glad I got that out of the way. One of the safest ways to take ownership of rental real estate is in a limited liability company (LLC). These legal entities will keep you safe from any nasty lawsuits in the future. Most rookies fail this part of the test. 10) Not Having Adequate Funding Regardless of your funding source, make sure you have access to capital when the need arises. If your renovation project goes over budget, you need to be able to complete the project and put the house on the market. Take action now to have the cash on hand you need to cover those properties that go vacant for extended periods of time. Having the needed money here is critical – this is probably one of the biggest reasons rookies fall flat on their face. 11) Not Having A Mentor Or Someone To Go To In A Pinch Finding a mentor may take a while, but it’s well worth the investment of time and effort in order to find one. Look locally in your city or community. You can also go online and search there too. 12) Not Learning The Fundamentals First The fundamentals don’t change. You have two skill sets, technical and entrepreneurial – you need to have a firm grasp on both. Set up the investment company correctly in the beginning, develop and implement solid systems and build a great team around you. This one mistake alone could crush you. Don't quit your job until your passive income is at least 30% more than your living expenses every month. Also, make sure you have at least 6 months of expenses on hand in a reserve account. Article Directory: http://www.articledashboard.com Shaun Steckler is a full-time real estate entrepreneur who became financially independent by investing in single family houses and apartment buildings. Steckler founded RealEstate-Entrepreneur.com to help struggling real estate investors become effective entrepreneurs. You can visit Shaun at RealEstate-Entrepreneur.com |
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