It seems that a week cannot go by without my in box getting bombarded with "fool-proof" investment ideas and opportunities. Add to that the laundry list of emails I get with new products and services that all promise magic bullets or towering pillars with all the steps I need for real estate success. If that were not bad enough, then come the emails from investors asking if I can help them follow through on their risky real estate investing plan or if we offer strategies that, in my opinion, are doomed to fail. So this week, I decided to write a tongue-in-cheek article assisting all those investors who are attracted to sure fire failure. Here are three sure fire ways to fail at real estate!
So you want to invest in real estate, huh? And you want to be REEEEEALLY bad at it? Well, congratulations! You're in luck! With this handy-dandy guide, you'll be well on your way to becoming not just bad -- not even awful -- but truly dismal with little to no chance of being successful in this, your chosen path to wealth creation. In fact, today we're offering ABSOLUTELY FREE a nearly foolproof method guaranteed to LOSE YOU MONEY with an efficiency you would not have thought possible! So sit back, relax, and be prepared to be blown away by these three investment mistakes that will have you penniless before you know it!
Get Rich Quick? Ha!
We're just going to hop right into it by giving you one of THE best ways to lose your shirt by investing in real estate: Buy into the get-rich-quick mindset. A number of "real estate gurus" are out to sell you their particular real estate investing technique or system. Many of them have even published books that supposedly give you "can't lose" tips on how to make money hand over fist. Often these books contain only very general tips about real estate investing that are readily available to anyone. Some of these people DO actually have a proven track record of real estate investing, but unfortunately, you're not going to get much in the way of super-secret, can't lose investing tips here; these books are sometimes little more than thinly veiled advertisements for the systems they are trying to sell. So SOMEBODY is getting rich all right, and that somebody is the author! And they're getting rich on the money you're shelling out to them for what amounts to little more than a hardback brochure, while chasing a pipe dream of vastly increasing your income in a ridiculously short amount of time with minimal effort. Genius, right? If you follow our advice here and completely ignore the hard work, discipline, and attention to detail it's going to take to become a competent, successful real estate investor, you're on the fast track to failure, friends. See? If you make real estate investment mistakes like these, how can you win? You're on the path to pauper-dom already!
Live in a Bubble
To say networking is "important" to a real estate investor is like saying the ability to catch a football is "important" to an NFL receiver. "Important" doesn't really cut it; it's your job. So if you're absolutely COMMITTED to complete failure in the real estate investing game, by all means ignore networking! Stay content in your little, anti-social bubble, far away from the back-and-forth, brain-stimulating, connection-generating, concept of networking. If you were aiming to be SUCCESSFUL at investing, I would suggest being active in a wide variety of networking organizations, both those that are real estate-specific like local REIA associations and those that are more general in scope like local Chambers of Commerce and small-business groups. But since you're setting the bar low and playing limbo with it, you can skip all that, stay at home, and watch "Golden Girls" reruns! This goes for social networking, as well. Stay away from Facebook, Twitter, LinkedIn, and all other forms of social media, because you might accidentally run into potential buyers, renters, home improvement professionals, and any number of a variety of others who could help you achieve success in your real estate goals. In fact, it's probably best to just trade that pesky computer in for a calculator with a sturdy minus-sign key, so you can more easily subtract money from your business accounts as your business self-implodes. See? I TOLD you that you would be broke fast!
Pretend That Risk is Just a Board Game
If you want to play craps with your financial future with dice that are loaded against you (and who doesn't?), then you should be completely oblivious to the concept of risk management. Don't worry about making decisions about how much risk you're willing to assume in your real estate investing career. Think nothing of over-leveraging yourself. Don't think twice about buying a fixer-upper just because it's in a promising location without carefully comparing the costs of repairs to how much value the property can expect to gain from them. What are you -- a sissy? You wanna fail? Fail BIG! Obviously none of us would ever make these recommendations in a serious manner, but it is very important for investors to realize that not all deals are good deals and not all real estate books, tapes and seminars are going to make you successful. It is also important to remember that not all strategies are good strategies either. It is very important to have a great team and a great plan and with both, real estate investing can be very beneficial to you and your family as well as your finances!
Can you think of other ways a real estate investor can completely disregard good sense in an attempt to drive themselves to financial ruin?
Tell other Memphis Invest readers about them in the comments!