Five Simple Mistakes Many Newbie Real Estate Investors Make – and How to Avoid Them

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Does this sound familiar?

You have scheduled your very first appointment to look at a property, and you are trying so hard not to look like you are a newbie real estate investor. You’ve done your homework; attended every local REIA meeting for the past 6 months, read numerous books (like these, the top 21 best books for real estate investors!), listened to tapes and CD’s and you have attended every seminar in your area. You spend most of your evenings here on BiggerPockets as well as on other forums and websites trying to soak up as much information as you can.

But on the day of your very first appointment all you can think about is that you are sure they will figure out you are a fraud; that you have absolutely no idea what you are doing.

All I can say is “welcome to the club”. This has been just about every new real estate investor’s experience.

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Today Is the Day You Look At Your Very First Property

The day has finally come to look at your first property. You get in the car and drive to the house to meet with the seller. You’re not sure this is even a motivated seller, but you need the practice so you set up the appointment anyway.

Pulling up to the house you start to feel pretty good about this meeting. You get out of the car, walk up to the door and shake hands with the seller. After a while you settle into an easy conversation asking questions about the property along the way. You walk all through the house taking notes and snapping pictures with your camera. Finally it’s time to go. You shake hands again; thank the seller for their time and leave.

What the Heck Just Happened?

Once you’re back in the car you are actually feeling pretty good about the meeting. You’ve just met with your very first motivated seller. You’re over the hump … or are you? That’s when it hits you like a ton of bricks that you’ve really messed up.

You didn’t try to close the deal or even tell the seller what to expect from you next.

When you’re a newbie real estate investor, you will almost always go back to your office and call the seller back with an offer. Not only is that OK, but it is the best thing for you and your seller. It would be much worse to throw out an offer without doing your homework, than to simply tell them that you will call the next day with an offer on the property after you have looked at the numbers.

But you didn’t do that. You were nervous and you just shook hands and left. Now you have to call them back and have what is sure to be an awkward conversation.

The Cure for Sidestepping Newbie Mistakes

There are some tried and true “remedies” for avoiding some of the most common mistakes while curing yourself of the newbie blues. Here are just a few you can try:

Avoiding Newbie Mistake #1

Always let the seller know what comes next. They need to be told exactly what to expect. You also want to be sure to send the seller a thank you note after the appointment for giving you the opportunity to look at their house and make an offer. Remember that they didn’t have to choose you.

4 Other Common Newbie Mistakes and How to Avoid Them

Newbie Mistake #2; Showing Up With Cheap Business Cards.

Everything is about “perception” in business and the image you portray sets the tone right from the beginning. So get a proper business card. Don’t show up with one of those cheap perforated business cards you buy at the local big box office supplies store and print yourself. They scream, “I’m a newbie”. Spend a few dollars with a company like VistaPrint and get some professional business cards. They look great and are very affordable. Also don’t be tempted to settle with the free cards they offer. They have their company name printed on the back of them, and everyone will think you are so new you can’t afford business cards.

Newbie Mistake #3; Sending Out Sloppy Direct Mail Pieces.

This one is simple; don’t send out sloppy direct mail pieces. They don’t have to be fancy, but they do need to portray your business in a professional manner. Be sure all of your contact information is correct, double-check for spelling errors and just make sure your mail pieces accurately covey the image you want to portray.

Newbie Mistake #4; Not Having a Website.

I know I have just about beaten this topic to death, but get a basic business website. One of the first opinions potential motivated sellers will form about you and your company will come from your website. Everyone looks up the company they plan to do business with. I am partial to WordPress sites, because they have the ability to grow with you as your business grows. But whatever you choose be sure that it has a simple contact form so that’s it’s easy for sellers to contact you. Just a reminder; you can get this done for $5 on fiverr.com.

Newbie Mistake #5; Not Portraying Yourself as a Seasoned Real Estate Investor

It’s actually pretty easy to look like a seasoned real estate investor by making just a few changes to your business and by acting confident (even if you aren’t feeling it at that moment). As they say, “fake it until you make it”. It’s not about fooling anyone, but rather just not announcing to the world that you are a newbie. Simple things like looking the seller in the eyes while extending a firm handshake will go a long way toward accomplishing this.

Do you have some more tips to share for not looking like a newbie real estate investor?

Photo Credit: striatic

About Author

Sharon Vornholt

Sharon has been investing in real estate since 1998. She owned and operated a successful home inspection company for 17 years. In January of 2008 she took the leap of closing her business to become a full time real estate investor.

26 Comments

  1. These are great suggestions Sharon. To expound upon your suggestion to “fake it until you make it”, I would add that when you do make an offer, be ready with responses to their objections. Think about the different scenarios they could come back with and have a response ready for each one. Be able to explain the benefits of taking your offer without stumbling though it – rehearse. Not only will this help seal the deal, it will give the impression that you have done this before.

      • One caution is not to just make up something if they ask a question you don’t know the answer to. Even a very experienced person won’t know every answer in every situation so be honest and tell them you aren’t sure but you will talk to your Attorney/Accountant/Real Estate Broker/Mortgage Broker/etc. and get back to them with an answer.
        Giving bad advice can torpedo your credibility and could get you in trouble if things went bad and they said you lied to them.

  2. Hi Sharon, good article. I always love hearing tips on yor direct marketing. I would add that it helps if you can give te seller some sort of information to show you are knowledgable. Market trends, or recently sold comps in the area, but if your market is doing really well that may not always help

    • Hey Mark –

      I appreciate that. I try to do that too; give them an idea about comps. It actually helps when you make a low offer and the market is not doing well. I guess we will see now that it is going back up. Thanks for your comments.

      Sharon

  3. Excellent advice. I would add a couple of my own:

    (1) Dress well. Get a nice watch. Avoid cheap shoes. Just because you don’t have a regular 9 to 5 office job doesn’t mean you should dress like a beach bum.

    (2) Be prompt in returning phone calls and answering emails.

      • This seems like a situation where you want to have the delicate balance.
        For sure don’t show up looking like a bum. Even if you are a contractor that is also an investor go home, clean up and put on some better cloths before you go there if you are in dirty work cloths beforehand.
        Probably don’t want to have an expensive suit either since they will think you are loaded. A nice shirt and good pair of pants with decent shoes should make you look professional but not to corporate.

        Also would take off the “We Buy Houses” signs on the car for both the tacky factor and you could embarrass them if the neighbors see them.

        • Shaun –

          Agreed. Leave the fancy suits and expensive cars at home. I think you want to look nice but appeal to “regular folks” at the same time.

          I would ditch those signs too. I never really thought about embarrassing the neighbors but that is a good point. I was always more worried about embarrassing myself.

          Sharon

  4. Do your homework BEFORE you inspect the property. Try to now every glitch there is about the property. And 2nd.. don’t nit pick.. only amateurs do that… it is what it is.. price it accordingly.

  5. Jim –
    I agree completely. I sold a property recently to someone at 50 cents on the dollar. I bought it “as is” and then sold it “as is”.

    About a week later, he said “I forgot to get a home inspection”. At that point, we were about 5 days from closing. I had to tell him the time for inspections was before he signed on the dotted line. I had to remind him that you don’t get a property that cheap (especially one that needs cosmetic repairs) and then get an inspection and ask for repairs.

    Thanks for your comments.
    Sharon

  6. I also think it’s important to have a relationship with a Realtor (for MLS comps) and a Real Estate Attorney (to draw up the contracts.) I sold an expensive home to an Attorney (no Broker) who sent me a P & S, which I faxed to my R.E. Attorney He threw it out and wrote a new one, which was better for everyone. The old story of a lawyer who represents himself, has a fool for a client.

    • Hi Susan-

      Having a Realtor on your team is a great addition for a number of reasons. Some of us have access to comps which is a whole lot easier than having to wait for one to “get around to” running comps for you. But if you don’t, then you will definitely need one.

      I also have a great closing attorney that happens to be a real estate investor himself.
      Most of the investors in our area use his simple one page contract. I always write my own contract, I want to be in charge of what goes in there. Thanks for your comments.

      Sharon

  7. Hi Sharon,

    Great content in this article and thanks for giving newbies like myself this vital information! Look forward to reading more of your posts… Take Care!

    Dave

  8. Good basic information that newbies may not realize are so important. I can’t stand it when someone gives me those cheap business cards. Bad impression right away. I also like the way you explained fake it till you make it. Its about being confident and not dishonest.

    • Hey Mike –

      I’m not sure how this ended up under “Nicole” but here it is again.

      Just being confident will go a long way toward looking experienced. I’m sure you would agree; it’s all about perception. Side stepping some of the obvious mistakes are pretty easy once you know what they are. Thanks for reading.

      Sharon

    • Hey Mike –

      Just being confident will go a long way toward looking experienced. I’m sure you would agree; it’s all about perception. Side stepping some of the obvious mistakes are pretty easy once you know what they are. Thanks for reading.

      Sharon

      • Nicole –

        Just go on the site fiverr.com. There is a search bar there. Just look up “WordPress”. Once they get the basic set up done, you are still going to have to work on it. Do you have any experience with WordPress at all?

        Sharon

        • None at all! and I had a website there way back in the day for my bath and body company, and I lost EVERYTHING! 🙁 Tons of awesome articles, TONS! It was crushing.. I’ve been scared of wordpress ever since? But I’d do it again.. 🙁 So, can I actually use a wordpress site as a free full fledged website? or, maybe I still have to pay for hosting? do they include the form in their design?

          Sharon, this is totally off topic, but I found a house my family loves while working my REI business. I mean REALLY love!!! 🙁 Perfect for us! I’m so heart broken, because there’s no way we can get into it, with our upside down home we’re in now! I’m sure you’ve encountered this before, so, just wanted to tell someone! LOL! I’m so sad tonight! ha! I’m sure I’ll feel better in a week or two! 😀

  9. Nichole-

    There is just no way around it; you’re going to need to learn WordPress. You can pick up a book at the bookstore on this. You can install a plugin to back up your site, so nothing is lost.

    You can use WordPress.com which is free, but I really don’t recommend it. First of all, if you ever want to sell anything whether it is your product or an affiliate product you can’t do that with the free site. Plus, they just don’t have nearly as many options. You can get hosting at Hostgator.com for under $10 a month. You want to go with that and the WordPress.org and hosting.

    You mentioned that you lost all your articles. You don’t type them right into your site do you?
    What you should do is type them in Word, save them there and then copy and paste them into your site. Never just type them into your site.

    Sorry about the house. Things happen for a reason. You just need to believe that you are where you are meant to be at this time.

    Sharon

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