Top misktake investors make?

13 Replies

Like the title says

What are the top mistakes investors make?

For my self it wasn’t starting soon enough. I had multi times where I thought money was going to be a issue. But I’ve had multi times where people have said here’s the money... and I honestly wasn’t even ready because I didn’t get over that boundary.

So what was some of your biggest mistakes that you learned from??

I'll give you the two biggest mistakes, because they go hand in hand:

1a - Paying off their mortgage out of pocket.
1b - Mistaking the property as the asset, instead of the equity and the cash flow from that property.

Originally posted by @Joe Villeneuve :

I'll give you the two biggest mistakes, because they go hand in hand:

1a - Paying off their mortgage out of pocket.
1b - Mistaking the property as the asset, instead of the equity and the cash flow from that property.

 What @Joe Villeneuve said is considered to be "higher level" investing. It's a way of thinking that escapes most investors , unfortunately.

Originally posted by @Mike Baxter :
Originally posted by @Joe Villeneuve:

I'll give you the two biggest mistakes, because they go hand in hand:

1a - Paying off their mortgage out of pocket.
1b - Mistaking the property as the asset, instead of the equity and the cash flow from that property.

 What @Joe Villeneuve said is considered to be "higher level" investing. It's a way of thinking that escapes most investors , unfortunately.

Agreed, but what's really unfortunate is it really is just a combination of applied logic and basic math.

Originally posted by @Bryan Martin :

@Patrick Flanagan

1. Not starting (I guess they wouldn’t reconsidered investors after so long though).

2. Not knowing your numbers.

3. Buying cheap properties and not understanding the value of equity, paying down your mortgage and appreciation.

 #'s two and three are contradictions.  Paying down your mortgage is not knowing your numbers.  Buying cash flow is a negative number.  Buying equity is also a negative number since it's free if you don't buy it.

@Patrick Flanagan

My biggest mistakes have been undertaking massive renovations and not having the cash reserves lined up to get all the way through. If you think it’s gonna cost $1 budget $3. Also factoring in vacancies and lost cash flow for months as renovations can drag on.

Now this is coming from someone who typically buys the wrist and then completely guts the to the studs.

@Patrick Flanagan Biggest mistake I see investors make is when they don’t have the experience, whether it be flips or rentals, yet they insist on owning by themselves. I’ve seen many either 100% of nothing because they never make a deal happen or they own 100% of a bad deal - a Dela that wasn’t a deal. For these investors I suggest they find someone they know who is successful and beg them to partner. They will learn so much doing it this way.

@Patrick Flanagan

On a similar note:

1. Not starting sooner.

2. Not doing all my research on mortgage programs as I was told I couldn't purchase a multifamily according to my lender despite being told I could right before closing.

3. Not house hacking!

Do your research people. Don't be ignorant like I was. Best of luck!

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