forget about it.

4. Depending on Wrong People to Get the Job Done

Many investors will go for who they can get to do the cheapest job which is not the way to go about this business. You should work to build relationships with your contractors so you can call them for future projects and jobs. Never discuss money, ideas, investments, etc with a contractor. They don't give a rat's rear end about how much you stand to make from the property you just purchased. Sounds silly, I know, but for some reason real estate investors, especially newbies think that everyone wants to hear the latest they heard from some seminar or course. So, I urge you to work to build a business relationship with contractors, mortgage companies, bankers, etc, that have your best interest at heart. Do not mistaken the Business Relationship for a friendship

5. Cashing Money Out of Every Deal, Pocketing the Money

Everyone of you have seen the late night infomercials with the rented mansion sitting on the water with someone telling the host about how they got $3K, $5K, or $20K from buying properties. And this was cash they got at closing. It sounds simple and it really is simple to do.
However, it's the one method that's caused more real estate entrepreneurs to go under than any other factor. I've used the same methods that you see on the infomercials myself earlier in my career and I paid dearly for these mistakes.

6. Overleveraging the Deals

The appraiser wants to make your deal work, ok. If you think for one minute the appraisal is a set number that clearly identifies what your deal is worth, then you're sadly mistaken. Look, I've had deals appraised at $250K, then I hired a different appraiser that would appraise the property at $315K.
That's a $65K difference with the same property without any changes made expect the one appraising the property!

Now, why do you think the appraiser gets a copy of the sales contract? So, they know where their figures need to be. Duh...

Why do you think the appraiser ask the mortgage officer, "where do you need the appraisal to be?"

It's obvious that appraisers can and will fluctuate the numbers to satisfy the bank, the client, and everyone involved.

7. Pride

When you've screwed up, it's time to admit it, learn from it, then move on. Many don't like to admit when they're wrong, but realizing it, then correcting the problem is the only way to handle your business.

I hope these 7 areas will shed some light as to where most investors screw up. I believe it's important to study the success and learn as well as learning from those that have made past mistakes.

Derek Pierce is a full time real estate investor and business owner. He got his start investing in real estate when he bought his first property in September of 2000. After this first deal, Derek literally became obsessed with Real Estate Investing. After being faced with being downsized in 2001, he quit his job to be full time in the business and hasn't looked back since. Now, he reveals the secret.

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