Don’t Be This Type of Real Estate Investor
I was recently a guest on another real estate investor’s podcast (everyone has a podcast nowadays) and was asked the following question:
“What’s a common mistake you see real estate investors make that’s completely avoidable?”
Great question to which I can give a slew of answers to, but there’s one mistake I want to share with you, in particular.
Ever hear the phrase “penny wise and dollar foolish”? Sure you have.
And this phrase perfectly sums up one of, if not the biggest mistake real estate investors make.
“But what do you mean by this Dan?” I’ll tell ya…
All too often I see investors overpay for a property and then cheap-out when it comes to managing it. That’s like buying a Ferrari then filling it up with regular unleaded gas. (in all honesty I’ve never driven a Ferrari let alone owned one, so my example may not be apple-to-apples, but you get the point)
They hire local handyman Joe Schmoe who’s 6-beers and half-a-pack of cigarettes deep on a Tuesday afternoon patching holes in the ceiling. Their neighbor’s kid Billy to do the “landscaping” because he’s in college and could use some extra money. And don’t forget Tommy, the nephew who was recently hired at his first accounting firm after (barely) graduating. Yea, he’s doing the books.
And yet, after putting this all-star lineup together they’re left wondering why the property isn’t doing as well as they initially thought it would.
I bring this up because if there’s a common mistake real estate investors make that’s completely avoidable, it’s overpaying for a property then trying to make it up for it by managing it like complete dog sh*t.
So don’t be that investor. And don’t give your money to those types of investors, either.
Anyone can buy a property, but not everyone has the skillset to manage a property in a way that maximizes its value. It’s like having a baby, any moron can do that. But can you raise a child? That’s the difference.
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