The 7 Biggest Pitfalls of First-time Real Estate

Investors

Underestimating Your Repair Costs

▪ This is one of the easiest mistakes a flipper can make▪ A lot of the time, you won’t even see things you need to fix until you are halfway through the flip▪ Work with a contractor when estimating repair costs. They will have a better idea of price▪ Tarek and Christina add an extra 10% to their budget to help when unexpected repairs arise

Not Having a Set Plan

You need to have your investing strategy set in stone before you buy a house. Once you have a plan, you’ll know what homes work and everything will fall into place.

Listing your Finished Flip for Too High

▪ After working tirelessly for so long, you’ll want to sell your flip for a profit quickly▪ If your flip ended up going over

budget or took longer, you may be tempted to list the house for too much▪ If the house sits on the market for

more than one month, it may be impossible to sell▪ When deciding the price, compare

flips with comps in area, even if you’ll lose money▪ The best thing you can do it sell fast

Hoping to Get Rich Quick▪ Flipping houses is not an instant get rich

scheme▪ As with any investing, you must be

patient. When flipping houses there will be a lot of blood, sweat, and tears▪ Make sure real estate investing is

something you are willing to spend a lot of dedicated time, money and work before you start.

Doing Everything By Yourself

▪ Some flippers think they can do everything on their own▪ Tarek El Moussa shows that one of the

keys to being a good flipper is having a team of experts. Your team should consist of:– Real estate agent–Home inspector– Appraiser– Lender– Attorney –Contractor ▪ Starting out with these basic team

members will help everything run more smoothly

Having Professionals Do Everything

▪ You learned that you shouldn’t do everything yourself, and on the opposite end, you shouldn’t let professionals do everything either▪ For example, you can pay someone to come into the house and do a final clean-up before you put it on the market, but that is going to come with a price. Things like this you can get your hands a little dirty and do on your own.

Believe it or not, you can’t out-rehab the market. You have to stay within the price range of the houses in your neighborhood. You will end up losing a lot of money if you put too much into a house.

Over-Rehabbing to Make Up for Paying Too Much

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