Whether you’re just getting started in real estate, or are a seasoned pro, there are several common mistakes investors make that can hurt their business. Luckily, many of these snafus can easily be avoided! Below we’re sharing 5 mistakes real estate investors make, and how you can use Backflip to prevent future blunders.
1. Jumping into an investment without a plan
The last thing any investor should do is purchase a home without knowing what they plan to do with it. It can be difficult to resist a good deal when it falls into your lap, but without a strong strategy in place, that deal can turn sour for you very quickly.
Using Backflip’s Returns Analyzer, you can not only complete a quick, thorough valuation, but also determine the best strategy for a property – whether it be Fix & Flip or Rehab & Rent. The Analyzer instantly calculates the data you need, customized to your business plan. Quickly understand if a property is right for you, and save time so you can strategically jump on great deals, fast!
2. Failing to do your due diligence
Residential real estate investing is a field that can be fairly complex. From finding quality properties to getting the right financing terms – there’s a lot of research and analysis within the process that, if done incorrectly, can turn a potentially good deal bad. To ensure you’re investing in the right property, at the right price, you need to understand what questions to ask, what your purchasing options are, and how to identify a good deal when it pops up.
Our blog has free resources that you can use to deepen your knowledge on key subjects that are critical for investors to understand, from financing and capital options, to investing strategies and market trends. Check it out here!
3. Not networking with local investors
The competitive nature of residential real estate makes many people wary of building connections with other investors in their area. However, there’s a lot to gain by building relationships and growing your local network. These connections can become a great resource for you, whether you’re looking for vendor recommendations, leads on deals, or just people to chat real estate with.
To aid our members with this problem, we host exclusive monthly networking events in Denver, CO and Dallas, TX for local Backflippers. If you live in these areas and would like to be added to our waitlist to attend one of our upcoming events, reach out to your Backflip member success manager!
4. Working with bad financing partners
When working with lenders, the funding process can move extremely slow, and high interest rates can make it difficult to turn a strong profit on your investments. In the current market, real estate investors don’t have the luxury to sit and wait in the hopes of getting competitively-priced financing.
Our goal is to be a true partner to our members, making the financing process faster and more efficient, while providing you with better terms. Once you’re ready to move forward with a property, you can get pre-approved for financing right from the Backflip app, instantly.
*All Backflip applications are non-binding and will never initiate a credit review
5. Focusing on one property at a time
The best investors in the world understand the power of using leverage to fund their deals, and are able to increase their overall earnings by taking on more properties at the same time. As you start looking to scale your business, having a steady deal pipeline can help you make more profit from less money, rather than focusing on just one property at a time.
The reality is that if investing in real estate was easy, everybody would be doing it. Fortunately, many of the mistakes investors fall into can be avoided with due diligence, proper planning, and strong partners.