Did you make any rookie mistakes? (Plus, NEW BOOK!)

Buying & Selling Real Estate
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Did you make any rookie mistakes? (Plus, NEW BOOK!)

Kaylee WalterbachPro Member
Rental Property Investor · Norman, OK · Member since 2018 · 158 posts · 529 votes

First-Time Home Buyer: The Complete Playbook for Avoiding Rookie Mistakes is available now!

@Mindy Jensen and @Scott Trench have been buying and selling houses for a collective thirty years. In First-Time Home Buyer, they’ll give you a comprehensive overview of the home-buying process so you can consider all of your options and avoid pitfalls while jumping into the big, bad role of homeowner. You can get the book, along with some stellar bonus content, on the BiggerPockets Bookstore!

We've all made some rookie mistakes... So if you could travel back in time, what’s the ONE tip you would give yourself before you bought your first property?

[email protected]
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Leon F.
Louisville, KY · Member since 2015 · 26 posts · 75 votes
5y

I bought my first investment property from the foreclosure sale and I did not evict the previous owner like I was advised.

It's been problems ever since.

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  • Sam HaackPro Member
    Real Estate Agent · Jackson Hole, WY · Member since 2019 · 27 posts · 39 votes
    5y

    My worst rookie mistake was trying to work with a lender that I chose without getting any recommendations to them. I simply found a lender online and went in headfirst. Not a good move. The lender couldn't close the deal based on some stipulation they had in their Fannie Mae portal. They also quoted me a higher interest rate because it was a condo - huh? Anyway, I then asked my agent for a recommendation on a lender and the new lender was able to close the deal in 3 weeks. Not picking the right lender made me homeless for a few weeks because I had set up my apartment lease to end at the same time as closing. Lesson learned - use the right lender you know can close the deal and also closings hardly ever happen on time!

    [email protected]307-699-1313Podcast Guest on Show Making $175K in Instant Equity on Her First Real Estate Deal
    1Reply
  • Adam TafelBusiness Member
    Real Estate Agent · St. Paul, MN · Member since 2017 · 609 posts · 406 votes
    5y

    Using my FHA loan on a cheaper property. Go bigger !

    Upside Property Sales 4.9113 Reviews
    WebsiteView Page
    0Reply
  • Diana Greece
    Member since 2021 · 2 posts · 1 vote
    5y
    Originally posted by @Joshua McMillion:

    @Kaylee Walterbach

    My biggest mistake for our first home purchase was purchasing based on personal wants and not an investment. I did not know BiggerPocket yet, and if gifted the information we have to know, I would not have purchased the property. Most markets in the U.S right now are growing by an average of eight percent or higher. The market I purchased has been flat, and I actually decided to sell employee tracking system it this year and rebalance it to a newer, more desirable market! I was also completely new to home purchasing and just accepted everything without thought. Knowing the process is POWERFUL and can save you time, money and make you better with negotiations. 

    Sincerely, 

    Josh

     Great that a lot of people can share their expirience here

    1Reply
  • Matt Leber
    Rental Property Investor · Orlando, FL · Member since 2015 · 353 posts · 269 votes
    5y

    @Kaylee Walterbach biggest rookie mistake: accepting re-roof quote from seller as fact and planning my reserves around it.

    I bought 2 off market duplexes from a guy I semi-knew knowing very well they both needed a re-roof. He already had a recent re-roof quote in hand that stated re-roof costs for the whole pack of 4 units. Once we closed on the property and started the re-roof process, the roofing company started claiming the quote was only for one of the two duplexes (the salesperson had incorrectly written the address of both units on the quote). I fought like hell to get them to do the whole job for the original quote but we couldn’t get them to agree. I had already paid them a deposit.

    So I bit the bullet and agreed to the basically doubled new reroof cost. The quote still wasn’t that bad. UNTIL they started pulling off the old roof and called to tell me ALL the plywood sheeting needed to be replaced on both duplexes, as it wasn’t up to current code bc it was too thin. I quickly learned plywood ain’t cheap, and it ended up adding another (I think $8-10k) onto the job cost.

    As a newbie, this basically ate up all of my reserves and was a pretty stressful time. I am a conservative numbers guy and having no reserves was very uncomfortable. We made it through and the properties now make us about $1k per month. I’m glad we weathered the storm but I learned some good lessons.

    1Reply
  • Bonnie Griffin KaakePro Member
    Real Estate Consultant · Denver, CO · Member since 2021 · 667 posts · 389 votes
    5y

    My rookie investor mistake happened years ago. I didn't realize that by moving out of a personal home and turning it into a rental that I qualified for special tax benefits like cost segregation. It would have made a big difference in my cash-flow for buying my next investment. 

    [email protected]303-475-4459
    1Reply
  • Abraham Kyc
    Member since 2021 · 2 posts · 0 votes
    5y

    I walked into my first buying experience thinking that I was some young "know it all" that could outsmart anyone. Here I am 14 years later, finally selling that same house, for only about 7 grand knocked off the principal. Yup, that was my "rookie mistake" that I'm finally getting out of.

    0Reply
  • Jaquetta T Ragland
    Real Estate Agent · Winston Salem, NC · Member since 2014 · 486 posts · 303 votes
    5y

    @Kaylee Walterbach yes my rookie mistake was entering a wholesaling agreement as the buyer. I put down $5,000 without understanding the full agreement. I tried to back out and the wholesaler would only refund me $1,000 back. It made me want to give up and not trust anyone ever but I didn’t allow it to. I learned a huge valuable lesson which is always understand your agreements.

    0Reply
  • Gary Dezoysa
    Orlando, FL · Member since 2011 · 176 posts · 23 votes
    5y

    This mistake thread is probably more valuable to me than a "do this" thread, thank everyone who contributed.

    1Reply
  • Bailey D Abbott
    Flipper/Rehabber · Dallas, TX · Member since 2021 · 7 posts · 3 votes
    5y
    Originally posted by @Leon F.:

    I bought my first investment property from the foreclosure sale and I did not evict the previous owner like I was advised.

    It's been problems ever since.

     Good to know Leon! I am sure you will not allow that to happen again 

    0Reply
  • Bailey D Abbott
    Flipper/Rehabber · Dallas, TX · Member since 2021 · 7 posts · 3 votes
    5y
    Originally posted by @Kenton LeVay:

    I would definitely go back and do some more thorough research on construction and hiring a contractor. I moved in and had a grand plan of fixing the place up including finishing the basement. I was very enthusiastic and bit off WAY MORE than I could chew. Dealing with the unending hurdles of renovating a 50 year old house and not knowing what to look for when hiring a contractor (which forced me to needing to fire the first one and replace him)....the first home has been full of setbacks. I'd go back and tell myself to slow down, start small, and don't be afraid to ask for (and pay for) help.

     Awesome advice Kenton! What/where have you done research on construction since?

    0Reply
  • Bailey D Abbott
    Flipper/Rehabber · Dallas, TX · Member since 2021 · 7 posts · 3 votes
    5y
    Originally posted by @Gary Dezoysa:

    This mistake thread is probably more valuable to me than a "do this" thread, thank everyone who contributed.

     Absolutely! "A smart man learns from his mistakes, but a wise man learns from the mistakes of others". 

    1Reply
  • Patrick Flanagan
    Property Manager · Prineville, OR · Member since 2016 · 261 posts · 166 votes
    5y

    @Kaylee Walterbach

    My mistake was not starting sooner:/

    0Reply
  • Lydia Woods
    Realtor · Baton Rouge, LA · Member since 2017 · 45 posts · 8 votes
    5y

    @Kaylee Walterbach Yes I made a couple. The tips I’ll give is to make sure you get home inspection, hire license contractors, get a good Realtor that knows the market well, preferably someone who is an real estate investor themselves.

    1Reply
  • Bryan Martin
    Accountant · Springfield, IL · Member since 2019 · 28 posts · 34 votes
    5y

    @Kaylee Walterbach Biggest mistake on my first house was getting too excited and felt like I needed the house. I honestly don't regret though. Even with likely overpaying and having a few costly issues, the house still cash flows and the mortgage is getting paid down and the experience has been valuable on acquiring units 2-8.

    0Reply
  • Billy Daniel
    Rental Property Investor · Russellville, AR · Member since 2014 · 688 posts · 509 votes
    5y

    One of my earliest mistakes was giving a plumber/electrician business the benefit of the doubt.  I tend to assume that people are always doing their best, but thats not always the case.  I tolerated weeks of excuses nd finger pointing thinking they just wanted to get the job done.  Luckily I eventually came to my senses when he caused yet another lengthy delay because he wanted to go work on someone else's house instead of finishing mine.  After all that, I still had to bring in another plumber to basically redo all of his work anyway......  Learned that one the hard way!

    0Reply
  • Joe Edwards
    Investor · Northern New Jersey · Member since 2020 · 94 posts · 96 votes
    5y

    @Kaylee Walterbach

    Biggest mistake on my first deal were 2 simple but very important mistakes

    1. I totally under estimated the time it was going to take. Its good to be optimistic but much better to function in the worse case scenario

    2. Check your emotions at the door. Being emotional in realestate will totally cloud your judgement.

    Learning these 2 things years ago has shaped me into the machine i am today lol

    0Reply
  • Giani BrussichPro Member
    New to Real Estate · Bedford, NY · Member since 2018 · 22 posts · 10 votes
    5y

    @Kaylee Walterbach

    Our rookie mistake was buying a single family home as primary residence without any understanding behind our potential financial options.

    Looking back, we should have house hacked or bought a duplex/multi family etc... Even so, our house appreciated in general (before this wild market). When the mortgage rates dropped, we refinanced WITHOUT cashing out. The numbers made sense to cash out but we did not want to increase our mortgage because we say no need (I know). Followed that up by not knowing you can refinance roughly every 6 months meaning we had the opportunity to cash out again and get an even lower rate.

    Point of my rant is to know your options. Even if it a luxury (ours is not luxury lol) SFH, there are financial options available to leverage that can keep your RE momentum moving forward.

    0Reply
  • Jason Mileshko
    United States · Member since 2021 · 151 posts · 49 votes
    5y

    Trying to time the market is a big mistake. You have to just get in the game as soon as you can. 

    0Reply
  • Felipe Vargas
    Member since 2021 · 1 post · 0 votes
    5y

    Hi, new on BP, my mistake was buying a property now before I found out about BP. The property is a Townhouse with HOA and high taxes at least for me, not that great for the price, bought it because I liked the location, and was close to my job. After I found out about BP I recognized my mistake with this property, gonna do my best to turn lemons into lemonade in the meantime.

    0Reply
  • Ronald Stephenson
    Investor · Wilmington Delaware · Member since 2019 · 40 posts · 25 votes
    5y

    As still in the rookie category. In my first deal, I made the error of falling in love with the cosmetics of the property rather than the numbers. The home inspection was clean; an appraisal was at the listing price. I did not negotiate for a lower price. I utilized the VA Loan and added the VA funding fee on top of the Loan, leaving me with no equity for the next few months but only $8,000 for closing.

    Bringing it to the present-day second floor has water damage, and the roof is pending a replacement. Allowed the cosmetics to fool me rather than the numbers and reality of the property. I learned from this as I moved forward to the next owner-occupied residence. 

    1Reply
  • Michael Williams
    Rental Property Investor · Sacramento, CA · Member since 2017 · 202 posts · 82 votes
    4y
    Originally posted by @Kaylee Walterbach: Have more money in reserves, something always comes up (Repair, eviction, etc.) 

    First-Time Home Buyer: The Complete Playbook for Avoiding Rookie Mistakes is available now!

    @Mindy Jensen and @Scott Trench have been buying and selling houses for a collective thirty years. In First-Time Home Buyer, they’ll give you a comprehensive overview of the home-buying process so you can consider all of your options and avoid pitfalls while jumping into the big, bad role of homeowner. You can get the book, along with some stellar bonus content, on the BiggerPockets Bookstore!

    We've all made some rookie mistakes... So if you could travel back in time, what’s the ONE tip you would give yourself before you bought your first property?

    0Reply
  • Mackenzie Grate
    Interior Decorator · Ulster County, NY · Member since 2020 · 204 posts · 177 votes
    4y

    One of my first rookie mistakes was getting not taking advantage of a FHA loan or a first time buyer's loan. I also got a 15 year mortgage instead of a 30 year mortgage. My thinking at the time was that I would save a significant amount in debt and I wanted to pay it down as quickly as possible. Now that I know more, and see good debt as more of an asset, I wish I would have just gone in at the 30 year mortgage to begin with. Refinancing cost extra money. Not the worst mistake in the world, but just a "if I could go back in time..." thought.

    0Reply
  • Garrett Gatton
    Real Estate Agent · Lima, OH · Member since 2019 · 35 posts · 18 votes
    4y
    Quote from @Nicholas Valente:

    @Kaylee Walterbach

    **DO NOT HIRE YOUR FRIENDS TO WORK AT YOUR HOUSE**

    (Obviously if you know their quality and timelines first hand and they are rockstars. Use the discount)

    Made a 6k mistake subbing out the electrical to my friend. We are no longer friends because of what happen.

    Nicholas,

    There is a lot of truth here. Unfortunately it sounds great on paper (or in your head) and in reality there are too many unspoken expectations or assumptions made. My buddy hired his BROTHER to paint a turnover for him to help him out and he left the job unfinished and created more work in the long run. This is all too common. 

    As a real estate agent I can also say that working with friends or family can be the most difficult. For anyone considering working closely with friends or family 1. Start with the assumption there will be awkward conversations and 2. COMMUNICATE COMMUNICATE COMMUNICATE!
    0Reply
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