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The Holiday Debate: How Much Time Should Investors Take Off This Season? (2019 Update)

The holiday season arrives in what seems like a long and slow build-up to just a few days of furious celebrating. It is, however, a period of time that lasts longer and has much more to it than real estate investors realize. Beginning almost immediately after Halloween, those holiday decorations, sales, advertisements and products begin to appear. This can often send most people into a slow-down mode or a distracted phase as they begin to focus more on the upcoming season.

After all, why not? There is Thanksgiving to plan for as well as the weeks in which Christmas, Kwanzaa, Chanukah and other annual festivities occur. This is the time to meet with friends, do lots of shopping and dining out, and taking stock of the year just coming to a close. It is a wonderful time to enjoy the benefits of some downtime with the family and with your friends. And it occurs in almost any industry.

If you doubt this to be true, you need only consider the patterns of behavior you see in many companies and businesses. They start to slow down operations in many areas. Their investments in marketing, branding and even employee overtime decrease or disappear altogether. Company leadership may go on holiday for weeks on end and it can seem like many segments of business and industry have just hit the proverbial “pause” button while the holidays arrive, occur and transition into the New Year.

Even as we enter this new year you may see a lot less competition and activity, and this means that the answer to the holiday debate, (“how much time should investors take off this season?”) is actually simple.

What is the answer? It is: As little as possible.

Not a Grinch Move

Though it sounds like a pretty “grinchy” attitude to take about the holiday season, it is not a permanent step in your investment strategy. As a real estate investor, you have a lot more control over your schedule than many other workers in the modern world. You can enjoy the option of working while the rest of the world sleeps and take meetings or do business in small bursts throughout the day. While this may not be the greatest or most consistent approach, it is one way to keep up the pace during the holidays.

There are, in fact, some returns for just hitting the “stop” button altogether. While you won’t see any losses if you take a day or two off of the computer, not checking messages or emails, a savvy real estate investor in thriving markets, like those in North Dallas and its surrounding neighborhoods, should dial back on time out of the office.

Why? The advantages of working while your competition is sleeping off its turkey dinners, days on the slopes or hours of sale shopping are quite substantial. Your business, real estate investment, operates on taking opportunities before the competition and on making the most of the smallest advantage, fact or bit of information about a property.

If you are looking to make the best offers, find the best deals, get a lot of attention, leads and even visibility on your properties, the holiday season is a peak time for doing so. Whether it is a home you want to grab at a good price in Plano, a sale you hope to make in University Park or some lead generation throughout the North Dallas area, the holidays are the right moment to strike. Eager sellers, fewer buyers, simpler negotiations…these are but a few things to enjoy during a holiday season dedicated to growing your real estate investments.

If you found this article helpful, please share it with friends and visit our blog for more free tips. You can also get in touch with us at info@investmentclub360.com

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How to Make Extra Cash for the Holidays by Renting Out Your House (2019 Update)

Are you someone who finds themselves always traveling during the holiday season? Whether that season means Christmas, Thanksgiving or any other time of year, you may be missing out on a major financial opportunity if you are not renting out your home while you are away.
Before you hold up a hand and say, “no way” at the thought of vacating your home during an extended holiday visit elsewhere, think about what it might mean. There are, quite accurately, millions of people traveling, booking hotels and staying in somewhat unwelcoming settings during their holidays. The option for booking a private home is a wildly popular concept that is supported by dedicated websites. You can use what you know about real estate in your area to get a great rate for renting your home, and this can underwrite your travels or even your future investment plans.

A Single Example

If your home is in one of the major metropolitan areas, such as North Dallas or Plano, TX, you have thousands of potential customers eager to rent a cozy and private home for their holiday getaway. You can take a bit of time to calculate the best rate for the market, and for your expenses, and enjoy a nice profit.
Keep in mind that this is unlike a dedicated, furnished rental. This is your home, and as such, you’ll want to have a few contingency plans for such issues as family heirlooms or costly valuables that might be lost or damaged when renting to strangers. You are not actually a certain victim to any such catastrophes, but when you gauge the different issues that will help you choose the right pricing, it is something to consider.

For example, installing a secure and dead-bolt locked room for your special belongings, or paying rental on a storage facility is a cost to add to the mix. Also keep in mind that most travelers are not conscientious about energy consumption and may dial up the heating or air conditioning, use multiple devices and gadgets, leave lights on at all times and not feel worried about the expense. Calculate for the worst case scenario.
If you, yourself, are not traveling but simply monetizing your property’s rental value, you have to pay for an alternative accommodation for yourself and/or family and pets. Here too, you have to calculate costs for pet accommodations if you are traveling but not bringing them with you. A kennel or a pet sitter is also an expense you must calculate, and seek to pass on to the renters if possible.

Also, keep in mind that someone renting your home is going to be doing so as a “turnkey” property. They won’t bring linens or kitchen gear. This can be a costly venture if you don’t also calculate the costs of the added wear and tear on your household items or the costs for purchasing replacements to be used whenever renting.
Once you have looked online at the other homes available for rental in your area, the prices charged and the amenities included, you can then add in the extras and figure out if it is a viable choice for you. For most homeowners, it is a great concept if they intend to implement it on a regular basis.

Points to Consider

Do keep in mind that there is some disruption to your lifestyle if you are going to make this decision. You’ll want to consider your valuables and pets, you also have to consider items that cannot be removed but which may be liabilities. High priced entertainment systems, large antiques, and even wall art are costly things, consider them as you prepare your home for renters.

More significantly, be sure your insurance allows for a rental situation and replacement for any damages. If you are in a housing authority or cooperative, be sure your neighborhood allows these arrangements and what sort of laws apply.

You can make a fantastic profit by renting out a home during any holiday season. If your town does an amazing Fourth of July celebration a winter wonderland event or any sort of seasonal activity that draws lots of travelers, why not take in some profits?

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How to Prevent Tenants From Damaging Your Rental Property (2019 Update)

As a real estate investor and landlord, you should know that your property will always need some maintenance, repairs, or upgrades whenever tenants move out. There’s a difference, however, between normal wear and tear that comes from everyday use and actual property damage, which tenants should pay for and which you want to avoid whenever possible.

Before we get into the best ways to prevent tenants from damaging your rental property, it’s important to understand this difference. For example, when you enter a property for inspection when a tenant is moving out, you should expect to see worn carpet, scuffs on the walls, some small holes (from nails or tacks) in the walls, and other normal wear and tear. Likewise, the stovetop and appliances will look like they’ve been used, but they shouldn’t be significantly damaged.

At the same time, if you walk in and you see visible stains or rips in the carpet, larger holes or scrapes in the walls or unprofessional wall touchups, or significant damage to kitchen and bathroom appliances, you’re looking at property damage. And, while there are ways to deal with property damage and to get your tenants to pay for it, the best cure is always prevention. So how do you keep your tenants from doing this kind of damage to your property?

Screen Your Tenants

The first and best way to avoid property damage is to properly screen your tenants. We generally recommend letting your property management team take care of the tenant application and screening process, as they have the experience and tools to ensure that they find the best tenants for your property. However, if you plan on acting as your own property manager and/or screening your own tenants, be sure to do a background check and look for a few key red flags, like:

  • Prior evictions
  • A criminal record
  • A history of belated payments
  • Poor credit score

Be sure to get references and a rental history, as well, and follow up with their previous landlords. Ask about any damage they may have done to previous properties they lived in, if they owe any money, or if they appeared to have unauthorized individuals living in or subletting the property.

Of course, even the best tenants won’t always keep up with your property as well as you would like sometimes. So, in addition to finding good tenants who will be less likely to cause harm to your property, there are also a few things you can do to the property itself to prevent damage.

Fill in the Pool

Pools are attractive features, but they’re also expensive to maintain. And, when a pool is unmaintained, it can quickly fall into disrepair and cost you a lot of money to fix. In most cases, it’s better to get rid of the pool entirely than to take this risk. Alternatively, you could include a pool maintenance and upkeep fee in the rental agreement with regular inspections and cleanings to keep the pool in great shape.

Stick With Low-Maintenance Landscaping

Do you think that your tenants are going to go out and trim the hedges, weed the gardens, and/or do anything beyond basic lawn care? If so, you may be living in a dream world. Most tenants are good about mowing the lawn and doing basic yard maintenance, but if you have high-maintenance landscaping features, you might want to get rid of them because they’re most likely going to be neglected.

Say Goodbye to Carpet

Yes, carpet is one of the cheaper flooring options, but you can almost guarantee that you’re going to need to replace it or at least have it professional cleaned every time you get new tenants. You don’t have to go with expensive hardwood floors, though. Instead, go with laminate flooring. There are a lot of attractive laminate options that are durable, will hold up against moisture, scratches, and other damage, and won’t cost you a fortune to install. Plus, tenants prefer floors that look and feel like hardwood. It’s a win-win situation.

Follow these tips, and you’ll see a lot less damage to your investment rental properties.

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3 Dallas Suburbs for Real Estate Investors to Watch (2019 Update)

It’s no secret that Dallas has one of the very best investment rental markets in the US today. With so many people moving to the Dallas-Fort Worth area, rentals are in high demand, and investors are enjoying great ROIs with their investment property purchases. But which areas are the best places to look for those properties?

While downtown Dallas has a lucrative market, it is not the only rental market around, and some Dallas suburbs are showing major growth and opportunities for real estate investors.

Grapevine

Grapevine is an excellent location for investors looking to purchase mid- to high-end rental properties. Currently, the mean listing in this area is just under $370,000, and the mean rate for monthly rent is $2300. With rental rates increasing at a steady rate each year, purchasing properties now gives you a great opportunity to see a lot of positive cash flow.

Grapevine is especially attractive to tenants moving to the Dallas area for work, as it is conveniently located to the northwest of Dallas and is nestled on the shores of Grapevine Lake. The suburb offers numerous attractions, amenities, and culture, including museums, nightlife, and more, making it a great place for individuals, couples, and families to live.

Plano

Plano offers another great opportunity for real estate investors, with average market values at just over $500,000 and average rental rates at nearly $2000 per month. While these numbers may not be quite as attractive as the ones you’ll find in Grapevine, Plano is definitely a suburb to consider, as rental rates and property values are likely to increase in the next few years.

Within an easy commute of DFW International Airport, downtown Dallas, and Dallas Love Field, Plano is in a prime location. Not only that, but Plano is also served by the DART light rail line, making it easy to get around town, even if you don’t have a car or you don’t want to deal with traffic. These details make Plano a serious contender for tenants looking to move to the Dallas area, but they’re not the only attractions by far.

Plano is home to numerous top schools, including Haun and Andrews Elementary Schools, CM Rice Middle School, and Jasper High School, all of which are highly ranked. And, whether tenants have kids or not, there are numerous things to see and do in Plano, making it a great place to live.

Frisco

Last but certainly not least, Frisco is a highly popular suburb for families. In addition to great schools, this area boasts numerous art exhibits, spas, and other amenities, luxuries, and features. The property values are in line with Plano, at just under $513,000 on average, but rental rates are a bit more profitable at $2100 per month.

In addition to having slightly better rental rates than Plano, Frisco also typically has more houses on the market for sale than Plano, making it easier for investors to find properties to purchase. Also, the 42 schools in Frisco are some of the highest ranked in the state, and the suburb offers a number of activities and events for kids throughout the year.

Frisco has recently undergone significant growth, but the boom seems to be just beginning. In the next few months and years, we can expect to see property values increase and rental rates soar, as well. This lively, family-oriented suburb is definitely a place to consider when buying rental properties now and in 2017.

Each of these three Dallas suburbs has its own unique style and feel, and they’re each very attractive to high quality tenants who are moving to the Dallas area to work for large corporations. In addition to being set to become the next investment property hotspots in the Dallas area, these suburbs command impressive rental rates, and you can expect to see both rates and property values increase steadily over the coming years.

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5 Things DIY Landlords Should Know Before Managing Their Own Rental Properties (2019 Update)

If you’ve recently purchased an investment rental property – or if you’re just starting to think about becoming a landlord – you’re probably thinking about your bottom line. You’re looking at how much you can charge in rent, how much you’ll have to pay on your mortgage and property taxes, and how much you’ll need to set aside for repairs and maintenance. When you look at all that, it’s easy to think, “Well, maybe I should be my own property manager to save some cash…”

Before you commit to managing your own property, though, there are a few factors you should know about. Understanding these could make a property management firm’s fees look much more attractive.

How Will You Get and Retain Tenants?

First, you’re going to need to attract good tenants to your property if you want to start collecting regular cash flow. Are you familiar with all of the appropriate listings where you can advertise your property? Do you know how much it will cost you to advertise and how much ROI you’ll get from that cost? If you don’t have a good advertising plan and the tools to gather appropriate data analytics, you could very easily spend a lot of money on advertising that isn’t actually doing much to find you quality tenants.

Then, once you’ve found great tenants, how are you going to keep them? Lack of maintenance, delayed responses, and other factors on your part could make good tenants less likely to renew their lease, and tenant turnover can be a real problem for your investment, especially if you have trouble finding new tenants to take your old ones’ place.

You’re Going to Be on Call 24/7

You already know from personal experience that home emergencies don’t always happen during business hours. When something happens at your home in the middle of the night or early in the morning, you call the appropriate specialist and have it taken care of ASAP. When something happens at your rental property, your tenants are going to call you. And you’ll need to be available to answer their calls at all times of the day or night. Are you prepared to deal with a plumbing emergency at 4:00 AM?

How Will You Deal With Security Deposits?

When your tenants sign the lease and hand you a check for the first month’s rent, they’ll also hand you a separate check for the security deposit. You must have a separate account set up to hold tenants’ deposits. In fact, it’s not just a bad idea to put the deposit in your personal or business account with the rent check – it’s actually illegal. So, are you ready to deal with security deposits and how you’ll collect them, disburse them back to tenants, and/or use them to make repairs when tenants move out?

How Will You Handle Late Rent Payments?

In addition to having separate accounts for rent and deposits, you’ll also need to have a system and policy in place to handle late rent payments. How much will you charge in late fees? How will you collect late payments? Do you know the legal proceedings if you have to evict a tenant?

Dealing With Insurance Companies

When disaster strikes, you will need to deal with your homeowners’ insurance company to get repairs and damages paid for. You’ll need to do this in a timely manner so that your tenants have a safe and secure place to live. If you don’t, you could be dealing with a lot more issues. At the least, your tenants might choose to move out, leaving you with no cash flow from the property, or in a more severe case, they might even decide to sue you for damages.

All of the scenarios and factors we’ve mentioned here may sound like a nightmare, but they don’t have to be. Some people have the background, talent, and skills to take on these tasks and duties, but if you don’t want to deal with them, your property management company can help you out and make your job as a real estate investor much easier.

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1031 Exchange Rules That Every Real Estate Investor Must Know (2019 Update)

The 1031 exchange is one of the most intriguing things about real estate investing. Basically, by performing 1031 exchanges and continuing to reinvest your profits from previous real estate investments, you can defer paying your capital gains taxes indefinitely. Of course, to take advantage of this tax exemption, you’ll need to know a few important rules. Otherwise, you could end up with a massive (and unpleasant) surprise from the IRS after you sell your next property.

1031 Exchanges Only Work for Investment Properties

Many people, when they first learn how a 1031 exchange works, will think to themselves, “Well, why don’t I do that with my home? I’ll just put the money I make from selling it into my next house, and I won’t have to pay any capital gains taxes…” Unfortunately, you cannot do a 1031 exchange on your primary residence. It can only be performed with investment properties.

So, if you’re planning on doing a 1031 exchange, think very carefully about your investment plan. You cannot sell an investment property and then buy a house to use as your primary residence until you decide to rent it out later, or vice versa. Both properties must be investments, not your residence (even on a temporary basis).

It Doesn’t Have to Be a One-for-One Exchange

A lot of investors use 1031 exchanges when they sell a smaller or less expensive property to buy a larger one or one in a wealthier area. This is not always the case, though. You may use the money you make selling your investment property to purchase as many new properties as you want, so long as their combined worth does not exceed 200% of the value of the property you’ve just sold.

You Don’t Have to Do the Exchange Immediately

Traditionally, 1031 exchanges are done swiftly, as you sell one property to buy another immediately. However, that’s not always possible (or even plausible) in modern real estate markets. A delayed exchange can be arranged, but you’ll just need to find a third party to hold your capital from the sale until you purchase your next investment property or properties.

But You Can’t Wait Forever – You Must Identify a Replacement Property

At the same time, you cannot simply put your 1031 exchange on hold forever. You must identify and designate a replacement property within the first 45 days after the sale of your first property. Because it’s common for deals to go south or fall through, you may designate as many properties as you want. Then you must move forward to attempt to purchase at least one of them, using the funds from your sale.

1031 exchanges could save you massive amounts of money in capital gains taxes, but keep these rules in mind before you attempt your first (or next) exchange. You want to ensure that you are operating within the law and that you are executing a legal 1031 exchange before you commit.

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The Right Way to Invest in Foreclosures (2019 Update)

Maybe you saw an advertisement for foreclosed condos for sale in Dallas, TX, and thought to yourself how fantastic it would be to get a valuable property in a booming urban area while the price was rock bottom. The foreclosure market is often full condors or apartments for sale, along with other properties in Dallas, TX And as the area grows even more, we’re sure to see a pretty consistent flow of foreclosures to tempt investors in the future.

But getting into foreclosure investing isn’t as easy as just picking up a cheap property. There are some things that you need to know to buy up those foreclosed condos in Dallas without running into any problems.

You Need a Strategy

Before you can decide exactly how you’re going to hold the investment and later resell it, you need to know why the property became a foreclosure in the first place. Apartments for sale in Dallas, TX generally don’t last long due to the rapidly growing business sector. Foreclosures could just be a unique circumstance, which is what you’re hoping for as an investor. But take a look around the neighborhood or area first, and be sure that this isn’t an indicator of a larger trend. This could affect your ability to resell the property in the future.

Leave Room in the Budget for Improvements

Most foreclosed condos for sale in Dallas, TX aren’t going to be turnkey properties. Foreclosures often bring out feelings of panic in homeowners, and you’ll frequently see foreclosed homes that have been stripped of everything – lighting, blinds, even the flooring in some cases. And if the homeowner was busy trying to keep up on the mortgage, you can bet that they weren’t spending their money on upgrades and remodels.

For this reason, be sure that your budget is big enough to cover any remodels or fixture replacing that needs to happen for your foreclosed property to appear livable.

Look for REO Foreclosures

If you can find foreclosed apartments for sale in Dallas, TX that have already been through the auction process, and haven’t been sold, you may be able to pick them up in a move called “buying REOs”, or “real estate owned”. This is the least risky way to purchase foreclosures because it’s the closet thing to a regular sale. You aren’t taking over a mortgage, or investing via auction; you’re simply purchasing a property through a real estate agency like always. With less confusing paperwork and fewer potential legal matters, you won’t have to worry about stumbling blocks along the way.

Find a More Experienced Partner

If you are a solo real estate investor interested in checking out the foreclosed condos for sale in Dallas, TX, it’s probably best to team up with a more experienced investor at first. Foreclosures offer several unique factors that have to be taken into consideration, and foreclosure auctions can be a risky way to acquire property. Lean on the guidance of an investing mentor at first, and you’ll find it much easier to succeed in the foreclosure market.

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Top 5 Tips for Identifying a 1031 Exchange Replacement Property (2019 Update)

One of the major expenses that real estate investors run into is capital gains taxes. Every time a property is sold, these taxes can create a hefty burden on your profit margin. But there’s a way around that, if the purchase falls into the right category. The IRS allows sellers to defer capital gains taxes by doing a 1031 exchange.

Under this type of exchange, the property has to be held as an investment, not as a principle residence; it has to be exchanged for like-kind property; and there are specific time frames that have to be met. Identifying situations that qualify can be tricky, but learning how to find those deals is a great way to keep your profit margins high. Here are five tips for identifying a 1031 exchange replacement property.

Tip #1: Follow the “3 Property Rule”

This rule is set forth by the IRS, and allows the investor to identify up to three possible replacement properties for the future. They have to eventually acquire one, two, or all three of the properties.

Tip #2: Follow the “200% Rule”

Within the three property rule from above, there is another rule that can make it easier to fill the quota. As an investor identifies those three possible replacement properties, their total fair market value (of all three properties combined) cannot exceed 200% of the fair market value of the relinquished property.

Tip #3: Alternatively, follow the “95% Rule”

This isn’t a commonly applied rule, but it can be in certain situations. This rule states that as the investor identifies the three properties, that total no more than 200% of the value of the relinquished property, they also agree to acquire at least 95% of the total value of the three identified properties.

These first three tips will help you narrow down the many options you may have for real estate investing. By the time you find three properties that work for your investing budget, and that meet the 200% Rule, you’re likely to have eliminated most or many of the options.

Tip #4: Be Sure You Identify the Properties Correctly

The identified properties for potential acquisition must be identified in writing. This document has to be signed by the investor, stating that all properties have been legally and accurately described. The address and legal description of the property must be present, and the percentage share of a property that has multiple investors is also required on this document.

When the property is acquired, it must be “substantially the same” as what was described in the document. The IRS can be ambiguous on what this phrase means, but in general, the property has to have the same basic nature and characteristics.

Tip #5: Make Sure the Right Person Gets the Information

After ensuring that the identifying document is accurate, the investor has to provide the information to whomever is responsible for transferring the property to the investor; alternatively, anyone involved in the exchange, like the title company or the escrow agent, must receive the document. This person cannot be a family member or the investor’s real estate agent.

These five tips will help you ensure that you’ve identified the right replacement property for a 1031 exchange.

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Simple Ways to Invest in Real Estate (2019 Update)

In the last few decades, real estate has become one of the most common investment methods for any age group. Even throughout the recession and downfall of the housing market in the 2000s, real estate investment has remained a popular means of preparing for a comfortable future. But if you’ve never invested in anything before, you may be intimidated by the idea of buying and selling properties. Buying a house is frequently seen as a major life milestone in our culture, so it’s easy to understand how it could be daunting.

But you don’t necessarily have to jump right in to buying and selling houses or commercial buildings. There are some very easy ways to invest in real estate that aren’t quite as overwhelming. For beginners who want simple investment options, or experienced investors who just want new ways to branch out without a lot of effort, here are a few great options:

1. Investment Groups

Real estate investment groups are a great way to learn the ropes before you strike out on your own. If you don’t want to become a landlord, or worry about the paperwork, an investment group is definitely for you. The group (including you) will agree on a specific type of property that you are all interested in, and then the company will buy or build the properties with the money that the investment group provides. The company takes care of all the day-to-day details, and you see a check show up for your part of the rental or sales revenue when due.

This is a safe way to get started with investing while you learn more about what types of properties are the best options. It also allows you to learn from more experienced investors, and to develop mentor relationships.

2. Invest through Crowdfunding

Crowdfunding is still a relatively new idea in the real estate industry, but that doesn’t mean you should avoid it. Over the last year, crowdfunding platforms have distributed more than three billion dollars of real estate investments, up from two billion the year before. Clearly, this is a growing model that investors can take advantage of.

The key benefit of crowdfunding is that an investor doesn’t have to have as large of an investment to get started. Dozens or even hundreds of investors come together with just a few thousand dollars each to invest in large commercial properties that normally would require significant chunks from fewer investors. And crowdfunding allows you to move beyond your local opportunities, and spread your investments out all over the world. Take advantage of the market anywhere, and with less risk.

3. Live-in Flip

You’ve seen the reality shows where a couple buys a home in need of some remodeling and lives in it while they flip it. They end up with a tidy sum after putting some investment dollars and a ton of elbow grease into the place. If you’re a young, single person, a young couple, or a retiree, you are in a unique position where this could actually be a very simple way for you to start investing in real estate. It’ll be easier for you to live in the homes while you remodel them, staying in temporary lodgings between investments, or maintaining a very inexpensive rental home for between investments.

While this isn’t the easiest investment method in terms of how much you have to do, it is the easiest method in terms of getting a foot through the door. Literally anyone can buy a house, learn to fix it up with a lot of YouTube videos and the advice of local experts, and then resell it for a profit. And you may discover a new love of flipping houses along the way.

These three methods offer some great ways to get started in real estate investment. Depending on how involved you want to be, and what your budget is for investment, any of these options could work perfectly for you.

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Top 10 Worst Mistakes for New Real Estate Investors to Make (2019 Update)

Real estate investing is much easier to get started in than most people are led to believe. With the rise of crowdfunding real estate opportunities, and the popularity of real estate groups and REITs, new investors don’t have to have as much capital as they may have thought, and they don’t have to know it all to get started.

But just because it can be simple doesn’t mean that there aren’t some serious mistakes that can cause a new real estate investor to totally fail. If you don’t want to risk your first major investment, and lose the capital you saved up, pay attention to these 10 things and be sure that you avoid them.

1. Not Having a Plan

You cannot fly by the seat of your pants in real estate. While you do need to be flexible, you should have a plan in place, and a goal for every investment you make.

2. Not Negotiating a Better Price

Real estate investing is all about paying the lowest price possible, and selling for the highest price possible. If you aren’t willing to negotiate lower prices, or walk away from deals that are too expensive, you won’t make money.

3. Not Doing Your Research

Researching a property and the surrounding area is essential for every investment. You cannot rely on the information provided by a real estate agent (who wants to sell!), or a marketing agency. Be sure that you know for sure that every property you invest in has plenty of selling potential.

4. Assuming Real Estate Offers Fast Profits

Real estate investing is a long game. You’ll see cash flow early on with certain types of investments, but the real return comes after years of investing. If you’re in it to get rich quick, you likely won’t find the success you’re looking for.

5. Miscalculating Estimates

This is something that just takes experience to learn, but it can be a costly mistake to make. If you aren’t sure that your estimates for a remodeling project or other expenses are correct, be sure that you have someone with experience look over them. Even if you have to pay for their knowledge, it’s cheaper than going so far over budget that you don’t make any profit.

6. Going it Alone

Real estate investment careers shouldn’t be built on your own work and abilities. The experience of those who’ve been doing it longer than you, and the enthusiasm and buying power of those who entered the investment world with you, are valuable commodities that you should take advantage of whenever you can.

7. Investing One at a Time

If you are only investing in one property at a time, you aren’t really taking advantage of what the real estate market has to offer. You’ll waste more time looking for your next deal, not growing your portfolio, and not bringing in any cash flow, if you don’t have several projects going at once.

8. Lacking Multiple Exit Strategies

If you’re planning on selling your property in exactly one way, to a specific target audience, you are setting yourself up for failure. Ideally, every investment you make should have several ways that it can be sold or rented so that you make money, or at the least have a way out from under a lemon.

9. Getting Stuck with Bad Financing

If you ended up with a high-interest mortgage, a high monthly payment, a balloon payment, or some other bad financing situation, you are in for a rough time. Not only will you likely not make a great ROI on this investment, it’s also possible that you could be stuck with these awful payments for many years.

10. Letting Your Past Mistakes Stop You from Investing Again

Finally, the worst mistake that a new investor could make is to stop investing after a few mistakes. If you had a bad experience with a contractor, or you chose a house in a bad location, it’s easy to get discouraged. But real estate investing is a fluid market that is always changing. Dust yourself off, do some more research next time, and you’ll find your way to a successful investment career.