Top 10 Reasons You Will Fail as a RE Investor

The road is wide but the path is narrow to becoming a successful RE Investor. Here are my top 10 reasons you will fail based on my experience.

1. No plan- most people become investors because it looks good on tv or they come across a class promising them they will make 50K a year without working or buy houses with zero money down...... While both could be true for some they are definitely exceptions to common practices and not the rule.  Find out "why" you want to invest and when you want the fruits of your labor. IE. monthly cash flow, retirement acct, kids college, etc.

2. No experience with anything to do with investing- It will be extremely difficult to become an investor without some knowledge of investing, construction, real estate, mortgages, negotiating, etc..... If you have not been successful at many things in your life please think twice before dumping 50k into a get rich quick class. Start small!

3. No local mentor-ship- YOU NEED A MENTOR when starting out. It will save you thousands of dollars and weeks of time

4. No capital- contrary to popular belief you do need money to be a successful investor unless you consider 1-2 deals a year successful. Find a partner with cash if you have the other expertise needed

5. Failed partnerships- trust no one unless things are on paper, define roles and ultimate decision making capabilities. No handshake deals and never partner with someone that does not have the same skin in the game than you do. Never violate this rule!

6. Failed 1st deals- always pay for a full ARV appraisal on your first deal if you are doing the BRRR strategy or flip. Most peoples 1st deals sink them! Spend some time and money making sure it is a win.

7. Trusting your contractors- never trust your contractors completely. Be on site daily. Ask for receipts. Make all decisions. Contractor fraud is a billion dollar a year industry.

8. Not putting enough time into investing or managing your projects- if you don't have time to commit to RE Investing then don't do it. You need to be active in all investments to protect your money. You will not believe how fast things go south with a little bit of neglect.

9. Not having the right resources available- this is where a mentor can really help you succeed. Pull on their resources and along the way create your own. 

10. Trusting people- I don't say this because all people in this industry is bad but people will take advantage of you if you let them.  
Contractors will overprice bids because you are ignorant of the true cost of labor or materials and then create change orders to milk you for more money. Wholesalers will overprice deals and under price rehabs because you are ignorant of the area/comps and do not know construction. Insurance guys will sell you insurance you don't need. Agents can leave money on the table because they don't price your house high enough. Appraisers can undervalue your property because you don't know how to manipulate an appraisal.

Some of these things are maliciously done and some are by ignorance. The bottom line is if you have a mentor you should be able to avoid alot of these issues.