1. Planning as you go. A lack of planning is the biggest mistake you can make. You need first have a plan, then find a home that fits your plan. You need to look at it as an investment strategy and not just a transaction.
2. Thinking you'll "get rich quick." Real estate comes with a long term strategy. Make sure you understand that your investment is for the long haul and won't be a quick turnaround. Knowing your risk tolerance before you start can help you make smarter decisions.
3. Playing Lone Ranger. A key to being a successful real estate investor is creating the right team of professionals to help you. Creating a successful relationship with a real estate agent who specializes in investors such as Kyle Cunningham is a key to starting a great team. Also creating relationships with an appraiser, a home inspector, a closing attorney and a lender, both for your own deals and to assist with financing for prospective buyers will help round out your team. Kyle is also able to help you build your team through his past experience.
4. Paying too much. The biggest reason investors don't always make money is they pay too much for the property. By working with Kyle Cunningham, you will be working with someone who specializes in investment properties and property management and can ensure you are getting a good deal from the start to make money later on. He has lived in Las Vegas a majority of his life so he knows the city and knows the market.
5. Skipping homework. In addition to working with Kyle, you also need to spend some time learning about real estate investing. Make sure you understand what you are spending your money on. This will ensure both you and Kyle are able to help you invest in the right property at the right time.
6. Ducking due diligence. Investors often have to move very quickly on their deals. That doesn't mean they sign a contract and write a check without plenty of research, though. Not doing their due diligence about the deal, the costs or the market conditions, and they wind up draining their personal savings because the house needs extensive repairs or they can't sell it. You can't just assume the property will appreciate.
7. Misjudging cash flow. If your strategy is to buy, hold and rent out properties, you need sufficient cash flow to cover maintenance. Some people think they can manage the property on their own, but it takes a lot of work. We also offer property management services. We have a field technical who handles a large variety of maintenance tasks or our resident manager will dispatch someone to fix the problem such as a plumber, electrician, etc. Our property management team offers you peace of mind with your investment so you know it is in good hands.
10. Miscalculating estimates. Once you've done your homework, double the amount of time and money you think it will take. If you can still make money then, it's a good deal.
Shawn & Kyle Cunningham
Cunningham Group at RE/MAX Advantage