If you’ve never had an opportunity to see Kent Davis of Equistream speak, you need to attend the next Think Realty Conference & Expo. Davis is unique in his presence and the way he connects with the audience. He is knowledgeable, logical, and experienced. Everything you would expect out of an influential investor. At this year’s Baltimore Think Realty Conference & Expo, he spoke about the five most common mistakes that many real estate investors make.
1 | They Opt for Common Trends Over Common Sense
Davis is referring to those who see others investing and follow them instead of doing their own due diligence and using their common sense. Don’t follow someone into a bad deal or into a bad market. Do your own research, do your own comps, check the data available from your own resources. Follow your gut instinct, if it doesn’t feel right, don’t do it. Also, make sure to remember, if it is too good to be true, then more than likely, it is.
2 | They Focus Too Much on “The Pretty”
Some investors buy properties that are on the more attractive side. Yes, everyone wants a beautiful property, but at the end of the day, that shouldn’t be your primary focus. Your primary focus should be on your numbers and profits.
Davis shared the story of a perfect property he found to wholesale. There was already an interested buyer needed assistance researching the property. After the prospective purchaser and Davis got together, Davis proceeded to conduct his due diligence and acquired the property. The property was not pretty and he knew it would take too much time, money and effort to bring it up to a standard where he could sell it for a good profit. Instead, he turned around and sold it to the interested party. He made a good profit and the new homeowner got the property they wanted. The buyer put money into it and turned it into a lovely property. Both parties won. Even though this was an ugly duckling type of property, someone was still interested in purchasing it. Davis advised when you buy right, there is profit in it.
3 | They Try to Treat Every Deal the Same Way
Employing the best practice in one investment area to all strategies can be detrimental to your investing business because not every tip or trick is applicable. The way you evaluate properties should vary per niche. Each deal and each exit strategy are different and should be approached in such manner.
4 | They Focus More on Profit than Product
Don’t get caught up in this vicious cycle. You are in it to make a profit. Plain and simple, if your numbers or comps don’t add up and give you what you feel is the best margin for profitability then don’t purchase the property. Know your numbers.
5 | They Misplace Value
The main focus of value for investors is equity. Equity is the value of an ownership’s intent in the property. Stay focused on what is valuable and what is not. Don’t lose your focus.
By keeping these five actionable suggestions at the forefront of your investing strategies and if you work your deals properly, you will come out ahead of the investing game.
Check the Think Realty Events page for upcoming events and highlights from previous events.
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