10 Most Common Incorrect Beliefs by Inexperienced RE Investors

[Don Konipol]

Most Common Incorrect “Facts” by the Inexperienced

1. It’s “illegal” to purchase a property without the approval of the existing note holder (subject to)

2. If a property owner stops paying on a note the lender just “takes” the property

3. That there’s ONE foreclosure law in the U.S., not 51

4. That real property ownership is indivisible rather than a “bundle” of rights

5. That real as well as personal property rights isn’t under attach by political forces in the U.S.

6. Real estate prices always go up

7. Mortgage rates of 3 -4% are the norm

8. That real estate gurus / mentors have been successful in their real estate investing careers - if they ever actually had one

9. With no experience, knowledge or capital they can be successful by attending a weekend workshop 

10. Lenders are lining up to provide down payment, “gap” financing, and earnest money deposit financing so that they, with no experience, no capital, and no knowledge can purchase a property they incorrectly analyzed as a good purchase, for “nothing” down.

[David Krulac]

@Don Konipol  Great post!  #7. In 1971 mortgage interest rates were 7%, In 1975 mortgage interest rates were 9%, and in 1981 mortgage interest rates were 15% or more.  We have been spoiled by 2% & 3% interest rates, which we may never see again.

I would add a few more incorrect beliefs:

11. All the rent money goes into the owners pocket.

12. Vacancy/turnover is a minimal consideration.

13. All real estate owners are millionaires.