10 Mistakes Every Investor Makes & How to Avoid Them
Mistake #1 – Playing Without Rules
No matter what you invest in you must create and stick to personal
investing rules. It doesn’t matter if you invest in real estate, currency,
stocks or options, before you begin you must create strict strategic
rules that you will hold yourself accountable to.
Here is an example of the rules a real estate investor may have:
I personally look at 10 foreclosure properties a week.
I only buy properties that potentially have great curb appeal that will help
sell the property fast.
I do not buy properties that may generate less than $20,000 in returns.
I do not buy fixer-uppers that require more than $10,000 in repairs and
upgrades.
I only invest in properties that need cosmetic and minor repairs. I will not
consider properties that have problems with the foundation, termites or
mold.
I do not use more than 20% of my investing capital in a single investment
property.
Holding onto my cash is okay if it means waiting to find the right
opportunity.
I put my properties back on the market 15 days before they are back in
show condition.
After 60 days of no serious offers, I lower the price 3% and offer
incentives, such as a free plasma screen or no closing costs.
After 90 days of not selling the property, I list the property as a “rent to
own.”
In the event 6 months go by without selling the property, I will sell the
property to another investor at break even in order to wash my hands and
walk away safely.
At least 50% of my profits are re-invested into acquiring more properties.
The rest is for me to have fun with.
The rules above provide a checklist for the investor when considering
opportunities. By creating strict criteria, it places limitations on the
investor and takes the emotion out of the decision. There could be
multiple properties that the investor finds that he knows will create
great returns if he does $15,000 in repairs, or cleans up a small mold
If you enjoy this special report, subscribe to In the Money and receive your free copy of Money Matters for All Ages.
